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____________________________________________
Dean Amir Mirmiran
College of Engineering and Computing
____________________________________________
Dean George Walker
University Graduate School
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DEDICATION
To God, whom I serve and love.
To my family, source of love and inspiration. Thanks for your love and support
through this endeavor. Thanks for helping me to be a better spouse, father and friend for
you.
To my parents, who gave me the education required to be successful in the life.
To my brothers and sisters, for all your love and support during all these years.
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ACKNOWLEDGMENTS
Thanks to the members of my dissertation committee. Dr. Ronald E. Giachetti, Major
Professor, thanks for all your support, advice, patience, and help through this work. I
learned from you how to conduct a PhD research. Dr. Martha A. Centeno, thanks for
introducing me into the world of research. I enjoyed your lectures and all the talks we had
prior to defining my dissertation topic. Dr. Shih-Ming Lee, thanks for believing in me
since the first day we met. I enjoyed the opportunity of teaching for a couple of
semesters. Dr. Syed M. Ahmed, thanks for all your contributions as a member of my
committee during this dissertation work.
My everlasting gratitude to my brothers and sisters in Miami, thanks for giving me so
much help during my years as a PhD student. Thank you for sharing your lives with me
and my family, and always being there for me.
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holistic model of the supply chain integrating multiple perspectives, and providing a
systematic procedure for the improvement of a companys supply chain operations.
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TABLE OF CONTENTS
CHAPTER
PAGE
I.
INTRODUCTION ..................................................................................................... 1
1.1
Pivotal Improvement Tools, Techniques and Methodologies .................... 5
1.2
Problem Statement ...................................................................................... 8
1.2.1
Problem 1: Modeling of the supply chain ............................................. 10
1.2.2
Problem 2: Selecting System Improvement Strategies ......................... 12
1.2.3
Problem 3: Integrating the SCM and the core business orientation...... 14
1.2.4
Problem 4: Problem Summary .............................................................. 16
1.3
Goal and Specific Objectives .................................................................... 16
1.4
Research Methodology ............................................................................. 18
II.
III.
IV.
STAGES RESULTS................................................................................................ 72
4.1
Qualification of the Experts for Stage I .................................................... 72
4.2
Summary of the Results for Stage I ......................................................... 73
4.2.1
Characterization of each Maturity Level .............................................. 74
4.2.2
Prioritization of the Key Improvement Factor in a Supply Chain ........ 76
4.3
Qualification of the Experts for Stage II ................................................... 78
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4.4
Summary of the Results for Stage II ......................................................... 80
4.4.1
Validation of the Maturity Level: Undefined ....................................... 81
4.4.2
Set of Useful Improvement Tools for the Undefined Level ................. 82
4.4.3
Validation of the Maturity Level: Defined ........................................... 83
4.4.4
Set of Useful Improvement Tools for the Defined Level ..................... 84
4.4.5
Validation of the Maturity Level: Manageable ..................................... 84
4.4.6
Set of Useful Improvement Tools for the Manageable Level............... 85
4.4.7
Validation of the Maturity Level: Collaborative .................................. 86
4.4.8
Set of Useful Improvement Tools for the Collaborative Level ............ 87
4.4.9
Validation of the Maturity Level: Leading ........................................... 88
4.4.10 Set of Useful Improvement Tools for the Leading Level ..................... 89
V.
VI.
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LIST OF TABLES
TABLE
PAGE
xi
LIST OF FIGURES
FIGURE
PAGE
xii
Figure 22: Acceptance of the Definition for the Defined Level ....................................... 84
Figure 23: Acceptance of the Definition for the Manageable Level ................................ 85
Figure 24: Acceptance of the Definition for the Collaborative Level .............................. 87
Figure 25: Acceptance of the Definition for the Leading Level ....................................... 88
Figure 26: Views and Abstraction Levels for the S(CM)2................................................ 94
Figure 27: The Supply Chain Capability Maturity Model Framework ............................ 95
Figure 28: Example of a Maturity Level of S(CM)2 in Tabular Form.............................. 96
Figure 29: Example of a Maturity Level of S(CM)2 in Tabular Form (b) ........................ 97
Figure 30: The Graphical Representation of the S(CM)2 ................................................. 98
Figure 31: The Porters Chain Value .............................................................................. 102
Figure 32: View Customer, Level Manageable .............................................................. 108
Figure 33: Radar Graph for the View Suppliers ............................................................. 115
Figure 34: Maturity Levels for each view Assessed ....................................................... 127
Figure 35: Supply Chain Assessment Report ................................................................. 129
Figure 36: The S(CM)2 Assessment Methodology ......................................................... 130
Figure 37: Assessment Sheet for the S(CM)2 ................................................................. 132
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CHAPTER I
INTRODUCTION
perspective of the enterprise; they rather tend to focus on a single perspective or portion
of the enterprise.
These partial views are not unexpected, given the fact that solutions to companys
problems are frequently initiated at the department level. Not until the 1990s did many
companies have the technological means to develop methods and tools with a more
holistic view. Now, companies need to rethink their vision about their principal market
strategy. Customers have become more demanding, and they seek the latest product or
service at a low price, at the right place, at the right time, and with the highest quality in
the market (Chin et al. 2004).
excellence are required to, at the very least, survive the on-going transition that industry
is experiencing from mass production to mass customization (Caputo et al. 2003).
integration, most of their immediate suppliers are not integrated with the second tier
suppliers (NIST,1999).
Third Party Logistics
Manufacturing
Sales
Logistics
Distributor
Retailer
Distributor 1
Retailer 1
Distributor 2
Retailer 2
Distributor 3
Retailer 3
Distributor j
Retailer k
Supplier
Supplier 1
Enterprise 1
Supplier 2
Supplier 3
Enterprise 2
Supplier m
Enterprise 3
Enterprise n
Financial Support
Strategic decisions
Customers
For those enterprises looking to improve their supply chain, there is much advice
available. Unfortunately, the abundance of existing improvement methods could create
confusion in regards to prioritizing what to analyze and improve first: the processes, the
tools, the model or the methodology. These facts make the supply chain improvement
process more difficult. This research does not have the objective to develop a universal
definition of Supply Chain, but it provides a meta-model, that is a model of models,
useful for the improvement of an enterprise performance vis--vis the supply chain(s) of
which it is a member.
The remainder of this chapter provides definitions of pivotal concepts used in this
research. It also describes the problem being addressed, its importance, and what part of
the problem this research has addressed. Chapter 2 presents a review of previous efforts
regarding the evaluation, diagnosis, modeling and analysis of supply chain operations.
Chapter 3 explains the methodology used to generate the S(CM)2 conceptualization,
which includes the Delphi Method as a pivotal tool to model the supply chain elements.
Chapter 4 presents the results obtained from the Delphi Method. Chapter 5 explains the
S(CM)2 model and its verification and validation results.
Chapter 6 provides an
assessment tool and an example of how to use the meta-model to assess a supply chain.
Finally, Chapter 7 includes the research conclusions and recommendations for future
research.
1.1 PIVOTAL IMPROVEMENT TOOLS, TECHNIQUES AND METHODOLOGIES
There are many improvement tools, techniques and methodologies claimed by
enterprises to be best practices. Improving a system in an enterprise may involve the use
of best practices to reach some performance level. A Best Practice is a specific process
or group of processes, which has been recognized as the best method for conducting an
action by the leaders in the field (Lawes, 2006). These best practices in some cases are
not well-documented or defined because they consider only a partial picture of the
problem or do not present a solid, scientific basis to confirm they are widely applicable
(Davies and Kochhan, 2002). An important challenge for any enterprise is to customize
the best practice to fit its organization and environment. Three widely accepted
improvement processes which integrate several best practices are the Capability Maturity
Model Integration (CMMI), Lean Thinking, and the Supply Chain Operation Reference
(SCOR) model.
The Capability Maturity Model Integration (CMMI) is a product of the Carnegie
Mellon Software Engineering Institute. The model defines six maturity levels based on
Crosbys maturity grid (Gack and Robinson, 2003). The CMMI defines the best practices
related to the development and maintenance activities in a software or system product
lifecycle. The six capability levels are named Incomplete, Performed, Managed, Defined,
Quantitatively Managed, and Optimizing. The great success and wide adoption of CMMI
have motivated and increased the development of similar frameworks in different
disciplines, such as supply chain (Bunting et al. 2002).
Similar to the CMMI, there are models and frameworks designed to evaluate and
improve the enterprise-wide supply chain performance and management; most of them
highlight distribution logistics and inventory management processes (Huang et al. 2005).
A recent process reference model is the Supply Chain Operations Reference Model
(SCOR), which may eventually become an industry standard (Huang et al. 2004). SCOR
incorporated into the Lean Sigma approach looking to improve the process flow with the
lean concepts and reduce process variations with Six Sigma tools (Ferrin et al. 2005).
These lean tools might be part of the S(CM)2 model due to their orientation to improve
process performance, such as lead time, through waste elimination.
Similar to these improvement processes, the Supply Chain Capability Maturity Model
S(CM)2 may help to make strategic decisions to improve the performance of an enterprise
from a supply chain perspective, considering key business processes to improve the
enterprise supply chain(s). Depending on the maturity level of each company, the
S(CM)2 provides a toolbox with several best practices oriented to increase the
performance of an enterprise regardless of its size. With the contents of the toolbox, an
enterprise may measure, design and improve its processes with respect to the overall
supply chain. As a consequence, the logistic networks are optimized, enabling cost
reduction in transport and storage. Also, some other key variables respond faster, leading
to higher customer satisfaction (Lummus et al., 2001; Stank and Goldsby, 2000).
1.2 PROBLEM STATEMENT
One of the most important problems in supply chain management is the uncertainty
inside the processes and systems. Uncertainty in demand, pricing, quality, inventory
levels, and lead time among others, causes inefficient processes and non-value added
activities. The more uncertainty throughout a process, the more inefficiencies and waste
there will be in the process (Van der Vorst and Beulens, 2002). Reducing uncertainty is
difficult due to the complexity of the supply chain.
The complexity of the supply chain is determined by the size of a supply chain and
the nonlinear relationships among the supply chain decision variables. For instance, lead
times, inventory levels, and demand are nonlinear supply chain elements because they are
directly affected by erratic human behavior and the quality of market information
(Chatfield et al. 2004). One of the most studied effects of these nonlinear relationships is
the bullwhip effect, which is a demand distortion in the supply chain. This effect causes
big inventories, poor service, customers loss, and a bad utilization of the distribution and
production capacities (Lee et al. 1997).
Nowadays, there are several tools intended to help users to understand and improve
the supply chain processes and functions considering these nonlinear relationships; for
example, modeling and improvement of supply chain processes using simulation (Van
der Zee and Van der Vorst, 2005), regression analysis (Chen et al. 2000), and system
dynamics (Angerhofer and Angelides, 2000), among others.
Even though these efforts prove the usefulness of these tools, they only seek to solve
a particular problem in one section of the supply chain, rather than in the whole system.
Considering the large scope of supply chain management, the next paragraphs briefly
describe some of the problems enterprises encounter when they attempt to diagnose,
model, analyze, and improve a supply chain. These problems are:
1. Modeling of the Supply Chain
2. Selecting system improvement strategies
3. Integrating the SCM and the core business orientation
1.2.1
One of the main objectives of a supply chain model is to understand the whole system
performance by decomposing the supply chain into more simple elements.
The
10
because it conveys an image of a set of links with interrelated functions and a simple
process flow, as shown in Figure 2.
Supplier Relationship
Management
Supplier
Customer Relationship
Management
Enterprise Resource
Planning
Customer
This visualization is clear and simple, but it is not a good one, because an enterprise
has more than one supplier and more than one customer. Moreover, an enterprise can be
part of many supply chains. Nowadays, companies need to rethink their vision about a
supply chain from a linear series of functional activities that add value to their products,
to a network of links where the links can interact in a variety of modes, as needed for
their own process, (peer-to-peer, hierarchical, parent-to children, etc.) (Sengupta, 2004).
Even though there are many enterprise reference models in the literature able to
provide a comprehensive enterprise perspective, it is difficult to define a single model or
modeling technique capable of satisfying the supply chain modeling needs for all relevant
elements of an enterprise. Examples of these enterprise reference models are CIM Open
System Architecture (CIMOSA) (Kosanke et al. 1999), Zachmans framework for
Enterprise Architecture (Zachman, 1999), and the Generic Enterprise Reference
11
Architecture and Methodology (GERAM) (Bernus and Nemes, 1997). Even though these
models and tools are widely accepted, they were not developed considering the supply
chain systems needs but information systems or computer integrated manufacturing needs
among others; later evolving in enterprise architectures or frameworks (Noran, 2003).
One advantage of these architectures is that they provide a common language for all the
stakeholders (Whitman et al. 2001).
Nowadays, there are many different candidate solutions to supply chain problems.
Information systems solutions (Motwani et al. 2000; Markus et al. 2000; Davenport and
Brooks, 2004); Lean thinking solutions including value stream mapping, just-in-time, or
lean manufacturing (Phelps et al. 2004; Vitasek et al. 2005); Operations research tools
12
such as simulation (Chan et al. 2002; Van der Zee and Van der Vorst, 2005); and so on.
The abundance of possible solutions complicates the decision making process. Which
tool or set of them would provide the best solution to a specific supply chain problem?
How will the tool be implemented? In a set of tools, which will be implemented first?
How are they going to interact? The selection and implementation of any given tool does
not guarantee an improvement in the supply chain cost or lead time.
For example, a common information system solution is to implement Enterprise
Resource Planning (ERP).
implementing ERP solutions are those that had implemented, previously or in parallel,
strong continuous improvement programs like Total Quality Management (TQM) or Six
Sigma (Miller, 2004).
The latter highlights the necessity of implementing a set of solutions in a particular
progression to improve a supply chain instead of a single solution tool. In an attempt to
overcome these challenges, the S(CM)2 provides guidance about how to select the
required tool, through suggestion of a set of tools for supply chain processes according to
the maturity level and a specific view.
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1.2.3
Enterprises constantly are making decisions about make or buy from an outside
enterprise or a sister business unit. Some considerations influencing the decision are the
prevention of possible speculations on price and the impact on company profits, or the
prevention of knowledge outflow to their competitors (Argyres, 1996). In the 1980s,
enterprises were concerned about how far, upstream or downstream, they should integrate
vertical activities into a supply chain for a good or service. This vertical integration
enabled them to control the quality and performance of all the value-added processes
within the enterprises productive system, from the end of the chain to the customer
delivery (Harrigan, 1986).
However, vertical integration has been strongly questioned in regards to the actual
benefits in global competition. Open markets pressure companies to adopt better market
disciplines implying a reduction of their product catalogs and the breaking of vertical
links (Kakabadse and Kakabadse, 2000). Vertical integration motivation was difficult to
maintain, which lead to criticism about why an enterprise should maintain or develop
vertical integration instead of comprehensive contracting agreements with outsider
providers (Argyres, 1996). While the 1980s were dominated by enterprise acquisitions
and fusions, in the 1990s a change started to take a perpendicular direction. The
horizontal integration was motivated by the reorientation to the enterprise core business
(Timm, 1993).
Organizations redirect their skills and capabilities to high value-added activities and
trust their non-value activities to outsourcing enterprises (Harland et al. 2005). Scholars
14
and practitioners argue that the core business should stay in-house while non-core
activities may be outsourced. The outsourcing debate has changed from whether to
outsource to what and how to outsource (Kakabadse and Kakabadse, 2000). Therefore,
enterprises need to concentrate their efforts only in their strengths or core competences
and outsource all those activities which a partner can do better. Consequently, companies
should search for and use third-party alliances with the best in the market of all the
outsourced processes (Sengupta 2004).
This paradigm change implies some challenges in the supply chain integration,
among them the tendency to outsource information systems such that an enterprise may
obtain capabilities not available or feasible in-house (Kole, 1983).
Even though
information systems by themselves have some problems as discussed in the last point,
outsourcing it generates a new problem related with the supplier development. As more
outsourcing providers emerge, service quality and the nature of the relationship customerprovider become more and more important (Grover et al. 1996).
Regarding this problem, S(CM)2 provides a road map to improve the supply chain
processes. This road map considers both the benefits of the vertical integration into the
three initial levels, related to internal enterprise processes, and the benefits of the
horizontal integration into the last two levels, related to develop collaboration and
integration within supply chain members. In other words, the S(CM)2 suggests tools to
improve and integrate internal supply chain processes at low maturity levels and
integration between enterprises processes or external collaboration at the advanced
maturity levels for each model view.
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1.2.4
Considering all the problems described in points one to three, any advance in supply
chain integration models, using a cross-disciplinary point of view, represents a useful tool
or methodology to increase the performance of an enterprise.
disciplines may contribute with concepts, models, methodologies, and approaches that
may be applied to improve the enterprise performance (Stock, 1990). Considering the
relevance of information systems in the supply chain performance, tools or models from
this field may be used as the foundation for a new supply chain model, as is the case of
the Capability Maturity Model Integration (CMMI) developed by the Carnegie Mellon
Software Engineering Institute. ( http://www.sei.cmu.edu/cmm ).
1.3 GOAL AND SPECIFIC OBJECTIVES
The goal of this research is to provide a cross-disciplinary perspective of an
enterprises supply chain performance by developing a Supply Chain Capability Maturity
Model (S(CM)2).
concepts, and tools from different knowledge areas in order to increase the performance
of an enterprise in a supply chain system.
16
improvement road map in several maturity levels for the enterprise supply chain
processes, proving modeling tools useful to analyze the processes from a holistic point of
view. This goal has the following objectives.
1. To Identify of key factors that affect supply chain processes through literature
review and practitioners experience applying the Delphi method. This helps
define each maturity level and its particular scopes.
2. To Identify of the best practices available to improve the key factors
(objective 1), clarifying how to find opportunity areas and how to reach the
next maturity level from a holistic point of view. This provides enterprises
with a toolbox according to each maturity level and the starting point to
improve its as-is business process.
3. To Define of key views to model supply chain processes for evaluating the
improvement reached through the implementation of the best practices. Once
an improvement project starts, it is necessary to evaluate its benefits in the
supply chain.
4. To Develop of an assessment tool to determine if a company adheres to the
best practices. Considering not only a yes or no evaluation, but a more
detailed and documented way to identify matches and discrepancies.
Thus, to meet these objectives, the S(CM)2 is a meta-model which includes:
An improvement road map describing five maturity levels for the enterprise
supply chain processes, proving modeling tools useful to analyze the processes
from a cross-disciplinary point of view, and to improve the enterprise
17
A diagnostic tool to evaluate the as-is state of the enterprise and assign the
enterprise a maturity level. For example, the SCOR model uses a scorecard gap
analysis for this diagnostic purpose (Huang et al. 2005).
The
objective of this stage was to reach a consensus about what a supply chain is and the
taxonomy of the S(CM)2 regarding each maturity level. The second stage included the
integration of models, tools, and concepts available to improve the enterprise supply
chain in a draft meta-model, and the improvement and validation process through the
Delphi method. Finally, the third stage developed the S(CM)2 and an assessment tool
based on it, such that an enterprise may use this tool as a level of classification, useful as
a starting improvement point.
18
The Delphi method has been used as a modeling tool, because it is a research tool
oriented to obtaining a consensus from a group of experts with anonymous interactions
between them, avoiding thus confrontations and eliminating influences (Okoli and
Pawlowski, 2004). The panel of experts required for the Delphi method was composed
of academicians and practitioners in supply chain processes from different knowledge
areas. Chapter 3 explains in depth how the Delphi method is used to build the S(CM)2
and the sequence of activities required to do so.
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CHAPTER II
LITERATURE REVIEW
In the last decades, a lot of research related to enterprise modeling frameworks and
supply chain improvement tools has been published. Recent publications present supply
chain problems and how to solve them by recognizing the importance of the multiple
stakeholder perceptions (Sengupta, 2004), implementing operation research tools such as
simulation (Hicks, 1999), or using frameworks for modeling the supply chain (Appelquist
et al. 2004). These concepts, tools, and frameworks include modeling, analysis, or
attempts to explain the complexity behind the enterprise systems, which are not similarly
defined by each knowledge area.
Likewise, several frameworks have been developed to provide an open architecture
for general enterprise modeling. Frameworks such as Zachmans, IDEF, GIM, CIMOSA,
PERA and GERAM are commonly reported in research related to enterprise modeling
(Whitman et al. 2001, Dewhurst et al. 2002, Barber et al. 2003). These models represent
an enterprise through different views explaining, describing, and dealing with the
complex activities of an enterprise (Yu et al. 2000). In spite of the variety of modeling
scopes, the inherent complexity and dynamic behavior of the supply chain problems do
not to allow identify a unique tool, model, methodology, or philosophy able to improve
any supply chain process.
These general models were not necessarily developed in a supply chain context, and
they are typically static representations of a process found in the supply chain. GERAM,
20
for instance, does not make statements about how a process should be done. On the other
hand, supply chain models, which were developed within a supply chain context, do not
provide a clear road map to improve the supply chain or to react in front of market or
customer behavior changes. The following pages present a literature review of some
concepts, tools, strategies, and frameworks used to improve the supply chain and
modeling enterprise processes. Also, several contemporary best practices, which can be
merged and integrated to define a meta-model to assess the processes and performance of
enterprises in the supply chain have been included.
2.1 ENTERPRISE MODELING FRAMEWORKS AND ARCHITECTURES.
Enterprise modeling frameworks and architectures provide a better understanding of
the enterprises complexity. The partitioning and simplifying enterprise processes can be
studied through a common modeling language and methodology (Kosanke and Zelm,
1999). These frameworks and architectures represent a system at a particular point of
time or describe the life of the systems according to developmental phases or
improvements such as definition, development, operation and maintenance (Noran,
2003). Also, they provide systematic methods to capture business objectives and to
display the structure of how the information and material flow are related to the
enterprises organization (Yu et al. 2000); and the knowledge any enterprise requires to
do reliability analysis easier and more accurate (Yu et al. 2000b). Following are several
widely accepted modeling frameworks and architectures.
21
2.1.1
One of the oldest and most respected modeling frameworks is IDEF0 (Integrated
Computer Aided Manufacturing Definition).
Process
Input 0
Output 0
A0
Mechanism 0
Control 0
Output 1.1
Input 0
Activity 1
Output 1.2
Control 3.1
A1
M1.1 M1.2
Activity 2
Output
2.2
A2
M2
Activity 3
Output 0
A3
M3.1 M3.2
22
2.1.2
The GIM emphasizes the organizational structure of an enterprise and the associated
decisional system of production systems. The general objective of this integration
methodology is the analysis of the current production systems in order to detect the weak
points of the system. This diagnosis allows to design alternative system conceptions and
to support their comprehension (Zlch et al. 2001).
GIM builds on several static business mapping techniques like entity relationship
diagrams and IDEF0, and it also focuses on decision system analysis of the enterprise
(Mertins and Jochem, 2005). The GIM views are informational, decisional, physical, and
functional. The GIM life-cycle consists on analysis, design, and implementation (Bernus
and Nemes, 1997).
Conceptual Model
23
2.1.3
This framework was developed by John Zachman and published in 1987. It was
initially designed to develop information systems, and later evolved in some extensions
and formalizations to a framework for enterprise architecture (Noran, 2003). Zachmans
framework provides a common language for the enterprise; useful to develop any project
and solve any problem in a methodological road map.
24
Figure 5 shows
How
Where
Who
When
Why
Data
Function
Network
People
Time
Motivation
Perspectives
Scope
(Planners)
Enterprise Model
(Owners)
System Model
(Designers)
Technology
Model
(Builders)
Detailed
Representation
(Subcontractors)
Functioning
Enterprise
The PERA architecture recognizes the relevance of human judgment and decision
making to merge special management requirements, such as innovation and creativity,
with design. PERA helps to define a hierarchy arrangement in such way that dependency
on human understanding, judgment, and decision making required for a successful
implementation is minimized (Li and Williams, 2002). PERA includes the bases for the
25
Williams (2002).
26
Figure 7 shows a definition for the manufacturing case for the concept, definition and
specific design layers (Williams, 1998).
architecture is the bottom-up construction focus, which starts defining the basic
elementary tasks, in order to group them into activities that meet the strategic objectives
(Chalmeta et al. 2001).
Identification of
Enterprise Business Entity
Mission, Vision, and Values
(BUILDING
BLOCKS
MODULES)
Manufacturing (Unit
Operations) Functional Network (NETWORKS)
Human Component of
the Manufacturing
Architecture
Manufacturing
Equipment
Architecture
Information Functional
Network
Information Architecture
Human and
Organizational
Architecture
Information
System
Architecture
FUNCTIONAL DESIGN
OR SPECIFICATION
LAYER
Manufacturing Architecture
DEFINITION LAYER
Physical Production
Requirements (Operations)
Human Component of
the Information
Architecture
CONCEPT
LAYER
27
concepts of IDEF and GIM among other frameworks (Barber et al. 2003). CIMOSA is
based on a process-oriented modeling approach providing an architecture, which
facilitates the descriptive modeling of an enterprise operation. CIMOSA represents an
enterprises system from a general to a particular model passing through a partial model
for every view (ESPIRT Consortium AMICE, 1993). Figure 8 shows the CIMOSA
Organization
G
e
of nar
vi atio
ew n
s
Resouce
Information
Function
Implemantation
stages
Analysis
Design
Particular
Model
Partial
Model
General
Model
Implementation
Life Cycle
28
implementation or detailed design (Chalmeta et al. 2001), which are the same as GIMs.
CIMOSAs views are developed according to the CIMs manufacturers requirements
(Whitman et al. 2001). A couple of examples of views are function, information,
resource, and organization (Saenz and Chen, 2004) or decision, function, resource, and
information (Chalmeta et al. 2001).
However, CIMOSA includes neither a method to solve possible modeling
inconsistencies among views nor a method to build a dynamic integrated model
(Chalmeta et al. 2001). Since CIMOSA is a static model, it is insensitive to changes in
business objectives; thus, just a partial model has been done when the market conditions
change. Even though this partial model may be useful for a while, market changes
invalidate it quickly, requiring to start again the modeling activities (Yu et al. 2000).
Moreover, CIMOSA does not clearly represent strategic decisions and operational rules
(Yu et al. 2000b).
2.1.6
The
GERAM methodology focuses more on the implementation process than in the model
29
structure.
For instance, integration of the models for the strategic, tactical, and
operational decision levels are not clearly explained (Barber et al. 2003). Figure 9 shows
the reference architecture of GERAM, called GERA.
Identification of
Enterprise Business Entity
CONCEPT
LAYER
(BUILDING
BLOCKS
MODULES)
Manufacturing (Unit
Operations) Functional Network (NETWORKS)
Human Component of
the Information
Architecture
Human Component of
the Manufacturing
Architecture
Information Architecture
Human and
Organizational
Architecture
Information
System
Architecture
FUNCTIONAL DESIGN
OR SPECIFICATION
LAYER
Manufacturing Architecture
Manufacturing
Equipment
Architecture
Information Functional
Network
DEFINITION LAYER
Physical Production
Requirements (Operations)
30
31
Stevens Model
Integration, Internal Integration, and External Integration. The stages are focused on first
integrating the internal enterprise processes, in the three initial stages, before integrating
the external supply chain processes in the last stage.
32
The model looks similar to a waterfall development model that is used in systems
information projects. It starts from a baseline of processes integrated through technology
efforts. Once the technology integration is achieved, the second stage of integration is
concerned with the functions. This integration is based on enterprise organization. The
third stage aims at internal integration to the enterprises function, based on attitude
concepts; that is, a focus on human capital. Finally, stage four is concerned with an
external integration of suppliers, enterprise, and customers (Stevens, 1989). Figure 10
shows Stevens model. Even though Stevens model does not define a life-cycle, such as
the enterprise architectures discussed previously did, the four stages may be considered
as the time line or history of the integration process.
Stage 1: Baseline
Material Flow
Purchasing
Customer Service
Material
Control
Production
Sales
Distribution
Technology Based
Material Flow
Customer Service
Manufacturing
Management
Materials
Management
Stage 3: Internal Integration
Organization Based
Material Flow
Materials
Management
Customer Service
Manufacturing
Management
Distribution
Attitud Based
Distribution
Customer Service
Internal Supply
Chain
Customers
33
2.2.2
In the last years, a significant market change took place in the industry. Enterprises,
rather than isolated companies, competed as a supply chain against other supply chains.
Nowadays; the success of an enterprise frequently depends on how well-integrated the
enterprise is within a network of partner relationships. This market change has caused an
evolution and strengthening of the enterprise relationships, passing from a relationship
based on key business processes linked within enterprises, to becoming supply chain
business processes linked across the intra-company and inter-companies boundaries
(Lambert et al. 1998).
A model which includes these relationships is the architecture of supply chain
management presented by Cooper et al. (1997), which includes key supply chain business
processes; and flows of information and product, over a supply chain network structure.
This architecture highlights six key processes within an enterprise: Purchasing; Logistics;
Marketing and Sales; Production, Research and Development; and Finance. Processes
are integrated within several tier suppliers and several customers or end customers
through the key supply chain processes of Customer Relationship Managements, Demand
Management, Procurement and Returns, among others (Cooper et al. 1997).
This
architecture is shown in Figure 11. Similar to the enterprise architectures, this model is
static since it does not explicitly include a time line or development history. Moreover
there is no clear interaction and division among the key enterprise processes and the
supply chain business processes. Thus, it is difficult to identify a matrix of differentiable
elements such as those used by enterprise architectures.
34
Information Flow
Manufacturer
Tier 2
Supplier
Tier 1
Supplier
Logistics
Purchasing
Customer
Consumer /
End-Customer
Product Flow
Finance
Production
R&D
Figure 11: Integrating and Managing Business Processes across the Supply Chain
2.2.3
Based on an enterprise value analysis, Chandra and Kumar (2001) identified five key
perspectives and four views to represent the interactions between the members of a
supply chain. The perspectives defined are Marketing and Sales, Inbound Logistics (i.e.,
receiving and warehousing), Plant Operations (i.e., manufacturing, product assembly, and
inspection), Outbound Logistics (i.e., warehousing and shipping), and Service (i.e.,
organization and management).
35
Procurement
Marketing and Sales
Buy advertising
Campaigns
Buy sales
promotions
Inbound Logistics
(Receiving,
warehousing,
inventory control,
production planning)
Procure end-products
Procure raw
materials for
assembly and
packaging
Technology
Development
Information
Management
Consumer market
research
Incorporate market
needs in the product
Coordinate order
processing
Plant Operations
(Manufacturing,
inspection, product
assembly, product
packaging)
Outbound Logistics
(Warehousing,
inventory control,
shipping)
Others
Quality Inspection of
finished products
Assemble endproducts
Package endproducts
Procure shipment
modes
Service
(Organization and
management)
Inventory control of
finished product
Track and report
shipments
Manage inventory
carrying, quality,
back order, and
opportunity cost
Analyze cost
variance
Guarantee shipment
schedules
Figure 12: Member Enterprise Value Analysis (Chandra and Kumar, 2001)
The intersection of perspectives and views represents a set of relevant actions for the
enterprise supply chain. Even though this matrix does not show the relevant actions for
all the intersections among perspectives and views may be used as a quick reference to
assess the supply chain integration of an enterprise. Based on this matrix, they developed
the architecture of a cooperative supply chain member enterprise. They recognize that
the design, modeling, and implementation of a supply chain system is a complex
endeavor. The more cohesively tied the business processes of the members in the supply
chain are, the more coordination they will have. Greater coordination makes it possible
to have easier development of the supply chain elements, such as information
36
business block M E j
j
activities A. The transformation from material to final product takes place at the
activity level, while the order life-cycle occurs at the business level, involving business
processes required to process the order such as marketing, sales, product design,
production planning, and so on. The control sequence occurs at both inter and intra
levels to implement independent organizational goals, policies, and objectives (Chandra
Performance
M E1
Member Enterprise
Order-Life Cycle
1)
M (B
E1
Control Sequence
1 , P1 )
M (B
E1
Material
Flow
1 , P1 , A1 )
M (B
E1
1 , P1 , A 2 )
M (B
E1
n)
M (B
E1
2)
M (B
E1
1 , Pn )
M (B
E1
1 , P2 )
M (B
E1
Control Sequence
1 , P1 , A n )
M (B
E1
Process
Upstream
Downstream
37
Even though this member architecture includes an order life-cycle, it is not defined as
an enterprise life-cycle. Additionally, the architecture requires a value analysis as a
starting point, which changes from the customers point of view and over the time.
Finally, for the decomposition levels, it is not clear how to represent a whole system,
where an activity can belong to more than one process, or one process which belongs to
many business blocks.
2.2.4
Siau and Tian (2004) argue that an integrated supply chain must include
completeness, security, flexibility, scalability, and interoperatibility. Considering these
elements, they analyzed how Information Technology (IT), based on eXtensible Markup
Language (XML), Common Object Request Broker Application (COBRA), .NET, and
Semantic Web among others, can be used as enabling technology in order to fulfill the
information requirements for integration (Siau and Tian, 2004).
Based on the simplified architecture for supply chain the architecture of an integrated
supply chain was developed as is shown in Figure 14. The architecture includes internal
and external communication with the supply chain enterprises, and emphasizes the
relevance of the design and information system capable of interacting with different
technologies, platforms, and decision support systems.
Finally, they define five critical elements which an integrated supply chain must have
from the Information Technology point of view:
38
The IT may provide strategic, analytical and decision support functions, not only
operational management functions.
The IT may be interoperable and may be able to integrate systems within the
company and within companies.
R&D
Logistics
Operations
Marketing
and Sales
Service
Customer
Customer
Relationship
Management
Supplier
Relationship
Management
Fonds Flow
Information Flow
Suppliers
Supply
Chain
System
B2B
Applications
Parts, Services
Other Supply
Chain Applications
B2C
Applications
Database and
operation
management
applications
Information
Customers
Supply
Chain
System
Individual
Customer
Products, Services
39
40
Business Process contains the processes represented in the model as internal processes,
while the second column contains the supply chain business process, which implies the
interaction among enterprises processes.
Table 1: Comparison among Supply Chain Architectures.
Model
Enterprise Business
Processes
Enabling Elements
Flows
Stevens
(1989)
Purchasing, Material
Control, Production,
Sales, and
Distribution
Materials Management
and Distribution
Technology,
Organization, and
Attitude
Materials and
Customer Service
Copper et
al. (1997)
Purchasing, Logistics,
Marketing and Sales,
Finance, R&D, and
Production
Physical &
Technical
Management
Components and
Managerial &
Behavioral
Management
Components
Information,
Manufacturing
Management, and
Product
Chandra
& Kumar
(2001)
Procurement,
Technology
Development,
Information
Management, and
Others
Material
(Activity),
Process, order
life-cycle
(Business) and
Information
Siau &
Tian
(2004)
R&D, Logistics,
Operations,
Marketing and Sales,
and Service
Parts, Products,
information, and
services
Almost all the reviewed models use different processes in each column, except
Chandra and Kumars model, which considers the same business process but at two
different levels, as internal and external process. The last two columns show the enabling
elements and flows represented in every model. Even though there are many more
similar frameworks and architectures, one of them has been growing in acceptance and
implementation. This is the SCOR, analyzed in the following section.
41
Customer
Plan
Manufacturing
Facility I
Source
Return
Manufacturing
Facility II
Make
Deliver
Return
Intra Supply Chain
Inter Supply Chain
Source
Make
Deliver
Return
Return
42
The SCOR model is deployed in three levels of process details (Lockamy III and
McCormack, 2004b).
Level one, the top level, is related to process types and defines the scope and contents
of the model, implying the definition of the core management processes for the decision
areas Plan, Source, Make, Deliver, and Return. At this level is the set of competition
performance targets.
Level two, the configuration level, is related to process categories and provides a
set of core process categories. This level describes the characteristics linked to
the process types deployed within the core processes previously defined in level
one. Also, this level defines process categories because of the relationship
between a core management process and a process type.
Level three, the process element level, is related to the enterprise fine tuning. It
defines the ability of a company to compete successfully in a specific market.
This level consists of process element definitions; process element information,
input, and output; process performance metrics, best practices, systems
capabilities to support best practices; and general systems and tools.
Level four is the implementation. This level is not included in the model scope.
Even though the SCOR model has been used as a framework for integrated supply
chain management by Supply-Chain Council members like Nabisco, Procter & Gamble,
and UPS logistics, it is important to highlight that the model does not provide a unique
solution for the improvement of the supply chain. The SCOR model does not offer a
step-by-step procedure to improve the supply chain management and must be supported
43
by efficient systems and information technology, not defined by the model (Stewart,
1997). Moreover, According to the Supply Chain Council, SCOR does not include the
processes involved in sales administration, technology development, product and process
design and development, and some post-delivery technical support. Also SCOR assumes,
but does not explicitly address several processes such as: training, quality, and
information technology (IT) administration (non-SCM).
In spite of SCOR is widely accepted, some research is making up the SCOR model
shortcomings. There is a lack of change management considerations through improving
market analysis, processes synchronization, and the use of network modeling tools to
support change management decisions (Huang et al. 2004). Other disciplines like Soft
Systems methodology and Systems Thinking have been used to improve the model,
which is strong on technical dimensions, but weak on social dimensions (Holmberg,
2000). These two disciplines can strengthen the modeling process and define a clear
process vision before starting reengineering efforts.
44
clearly whether an enterprise performance metric is outstanding or not. Even though the
model provides performance metrics, it is not clear how a company can use those metrics
to obtain a supply chain performance measure able to evaluate a continuous improvement
process or benchmark with other enterprises (Huang et al. 2004). Considering these
improvement opportunities in the SCOR model, the next section reviews a couple of
models developed to provide a supply chain maturity path for enterprises.
2.4 A SUPPLY CHAIN MATURITY MODEL
Regarding the improvements on supply chain modeling mentioned in the last section,
McCormack et al. (2002) published the Supply Chain Management Maturity Model
based on Business Process Orientation. After that, Lockamy III and McCormack (2004)
published a research paper with the same scope. This model conceptualizes how to
include the SCOR model in their maturity model. However, based the maturity model
only in the SCOR and Business Process Orientation induce a lack of competition,
consideration, and innovation.
member list of the Supply Chain Council, the creators and promoters of the SCOR
model; thus, the results could be biased.
On the other hand, one interesting concept included in the model is the relationship
shown between the enterprise process capability and the maturity level of the enterprise
processes. The assumption behind this relationship implies that the more maturity level
the enterprise process has, the more capable it is (Lockamy III and McCormack, 2004).
This relationship also implies that the maturity taxonomy is directly related to the
45
enterprise process performance. The proposed model has five maturity levels shown in
Figure 16 (Lockamy III and McCormack, 2004).
Competition is based upon multi-firm networks
Extended
Integrated
Linked
Defined
Ad Hoc
Process Maturity
46
47
metrics is emphasized by this author. In spite of, the fact that a company has an SRM or
a CRM, there is no guarantee they will be compatible in measures or information storage
within the systems of the other companies in the supply chain (Motwani et al. 2000).
A similar attempt to develop supply chain modeling and metrics in an integral way is
proposed by Lambert and Pohlen (2001). They propose a framework to capture the
performance across the whole supply chain considering the interaction between the
corporate supply chain performance and the need to differentiate the supply chain in an
enterprise in order to obtain a competitive advantage among others key factors. The
framework provides a seven-step methodology, as follow:
48
49
management capability; waste and cost reduction; process and product standardization;
industry standards adoption; cultural change competency; and cross-enterprise
collaboration.
Similar to the lean thinking approaches, there are Six Sigma principles which can be
used for assessing the supply chain performance. Two principal issues related with
supply chain improvements are the business process synchronization and the process
variability reduction in key areas like distribution cost, stock levels, information
management or demand forecast. These issues might be controlled and improved using
six sigma concepts through controlling those decision making processes which impact in
the enterprises performance such as purchasing, pricing fluctuations and inventory
management; thus developing continuous improvement through a Six Sigma Supply
Chain (Garg et al. 2004).
On the other hand, since supply chain performance is directly linked to information
systems performance, much of the research focuses on Six Sigma approaches applied to
software development. The supply chain software has been challenged due to the fast
increase of customers requirements of information management oriented to making
decision processes related with inventory, delivery or production. Even though many
other approaches have been tried out such as the ISO9001 and ISO12204, the failure rate
of projects is high. Therefore, among others, Six Sigma for software and the CMMI
approaches emerge as a good opportunity to improve software implementation and
performance (Gack and Robinson, 2003).
50
There have been other attempts in regards to software development. For instance,
Gack and Robinson (2003) integrates Six Sigma for software, CMMI, Personal Software
Process, and Team Software Process as a set of complementary tools overlapping
concepts and providing better results than a single implementation of one of them.
Additionally, there are several combinations of CMM with other methodologies or tools.
For instance, McGuire and McKeown (2001) provide a 5 step methodology for adopting
CMM in an ISO environment. One of these steps is a gap analysis considered in the
SCOR model; another step establishes a metrics program such that a scorecard from the
Balanced Scorecard conceptualization or the SCOR model may be used. Similarly,
Murugappan and Kenni (2003) use CMM and Six Sigma in order to meet business goals.
They argue that Six Sigma and the CMM levels 4 and 5 are synergistic since CMM
provides a good infrastructure to apply the Six Sigma techniques.
Therefore, other methodologies or concepts from different fields might be used to
improve this process capability in a supply chain, such that the Six Sigma concepts of
variability reduction and control can be used in order to improve lead time and delivery
processes capability in a supply chain (Grag et al. 2004). In the same way, Lean
concepts can be used to provide effectiveness and efficiency to the process by eliminating
waste activities and all non-value-added tasks in the process through demand
management capabilities, waste and cost reduction, process and product standardizations,
industry standard adoption, cultural change competency and cross enterprise
collaboration (Vitasek et al. 2005).
Considering all these different improvement scopes, it is possible to conclude there is
a trend to integrate several techniques, tools, models and methodologies in order to assess
51
the processes of enterprises in the supply chain. However, which tool, technique,
methodology or set of them must be implemented first? Is some supply chain system
preferred for improvement initiatives? Is there some improvement route for the supply
chain assessment? Which supply chain improvement is first required? All these questions
have no unique answer. Moreover, depending on the current state of the supply chain
system, the possible actions might be different.
Therefore, the improvement road map provided by the S(CM)2 may help to define the
best improvement process for an enterprise interested in assessing its processes in the
supply chain. The following chapter shows the methodology applied in the S(CM)2
conceptualization.
52
CHAPTER III
RESEARCH METHODOLOGY
The previous chapters discussed several challenges related to building a supply chain
model. Considering these challenges of modeling the supply chain and based on the
literature review, it was concluded that a good meta-model would adhere to the following
general characteristics:
1.
Provide a clear description about the model foundations. The S(CM)2 should
describe how it was developed and how it is different from other models. Thus,
the S(CM)2 requires a supply chain management definition obtained from
practitioners and academicians. This definition is used as a starting point to
generate the model.
2.
Categorize the different areas of analysis that the model needs to address in a
supply chain. The S(CM)2 requires the input of practitioners and academicians to
define several views or dimensions, abstraction levels or perspectives; and a
defined life-cycle to represent the complexity of the system, similarly to the
representation used by the enterprise architectures discussed in the literature
review.
3.
Provide a clear description regarding the supply chain process assessment tool of
the model.
improve the enterprises processes after the enterprise model is done. Thus, the
53
S(CM)2 should provide a list of key supply chain factors for each life-cycle stage,
useful to assess a supply chain process through the model life-cycle.
4.
54
models are comprehensive for a supply chain; actually, they fail to model important
questions: What are the competitors doing? and How is it going to impact my metrics?
(Neely et al. 1997). Thus, improving the supply chain processes depends on the scope of
who is in charge of this project. Different people use different approaches based on their
experience and knowledge. Therefore, it is necessary to include and consider in the
meta-model conceptualization the point of view and experience of several people, who
are directly and indirectly linked to a supply chain process, either academically or
practically.
This chapter describes the methodology used in the development of the supply chain
capability maturity meta-model and how these requirements are met in the model
conceptualization and development. Furthermore, it describes how the meta-model was
analyzed, improved and validated by academicians and practitioners of the supply chain
field. The next section presents the Delphi Method, which is the research tool used as
data collection and conceptualization of the S(CM)2.
3.1 THE DELPHI METHOD AS A RESEARCH TOOL
The Delphi Method was developed by the Rand Corporation in the 1950s with the
objective to provide a technique to achieve the most reliable consensus of a group of
experts (Okoli and Pawlowski, 2004). Delphi provides a method oriented to structuring a
group communication process so that the process is effective in allowing individuals to
deal, as a whole, with a complex problem (Linstone and Turoff, 1975). This technique is
favorable to consider new and future trends in complex systems over an interdisciplinary
environment (Akkermans et al. 2003). According to Kengpol and Touminen (2006), the
55
Delphi Method is composed by three principal processes: Achieve the opinion of a group
of experts, collate and statistically summarize these opinions, and provide feedback to the
participants seeking for a revision in their judgments, if any.
1. Obtain the opinion of a group of experts. The Delphi Method usually involves
sending a questionnaire to an expert panel in each of a number of rounds. The design of
the questionnaire used in the first round must include a set of questions oriented to
obtaining the opinion of a group of experts. Generally the questionnaire includes open,
ranking or classification questions about the objective of the study. Some examples are
questions to determine trends (Hayes, 2007); identify key constraints in a new process
implementation (Akkermans et al. 2003); evaluate information technology proposals
(Kengpol and Touminen, 2006), validate frameworks (Holsapple and Joshi, 2000), or
forecast based on subjective judgment (Hong-Minh et al. 2001), among others.
The number of rounds should be sufficiently large to reach consensus in the experts
responses; at least, as many to reach marginal improvements or stability regarding
previous rounds. However, too many rounds may fatigue the panelist, such that the
quality on the responses and the number of responses decrease. In practice, most of the
studies use only two or three rounds (Mullen, 2003).
2. Collate and statistically summarize these opinions. The analysis of the responses
from the Delphi survey is generally quantitative and qualitative.
The quantitative
statistical analysis may include means and standard deviation, median, range, minima and
maxima, quartiles, inter-quartile range, and frequency distribution, among others
(Mullen, 2003). These are obtained from the numerical results of the questions, for
56
example using a five-point Likert scale (from totally agree to totally disagree) or
yes/no/do not know answer format (Verhagen et al. 1998).
The questionnaire may include statements divided on several questions, which are
looking for consensus by question.
collection, classification, and summary of all the comments or arguments provided by the
experts. These comments or arguments may be generated through the inclusion of openend questions in the questionnaire (Holsapple and Joshi, 2000). All the information
obtained from the analysis is used to modify the questionnaire for the next round in order
to get consensus.
3. Provide necessary feedback to the participants. The information obtained from the
analysis is included in a document and sent back to the panel of experts either in the
questionnaire or in a separated document. Typically, the participants have the opportunity
to modify their answers every new round, always keeping anonymity (Mullen, 2003).
Additionally, a very important decision on the application of the Delphi Method is the
number of experts to be included in the study. In the literature, the size of the set of
experts is reported in a wide range, depending on the purpose of the research. According
to Turoff (1970) the most recommended values are between 10 and 50 (Holsapple and
Joshi, 31; Akkermans et al. 23, Okoli and Pawlowski, 18; Haynes, 20).
Regarding the supply chain, there are several applications reported in the literature.
For example, the evaluation of information technology in logistics firms (Kengpol and
Touminen, 2006), the identification of supply chain solution in a building sector (Hong-
57
Minh et al. 2001), or the impact of the ERP on supply chain management (Akkermans et
al. 2003).
3.2 METHODOLOGY USED TO GET THE META-MODEL CONCEPTUALIZATION
Based on the information obtained from the literature review shown in Chapter 2, it
was decided to design a sequential and progressive conceptualization method to generate
the meta-model. Thus, the methodology used in this research includes three stages.
Every stage adds more information to the model and validates the results achieved in the
previous step. Finally, once the meta-model was validated, the final step was to design an
assessment tool, which allowed passing from one maturity level to the next one.
The objective of stage one was to generate a draft characterization of the maturity
levels in supply chain and obtain consensus of the key elements found in a supply chain
definition. The objectives of the second stage were to improve and validate the supply
chain definition, to improve the characterization of the maturity levels and to generate a
definition for each one of them. Moreover, it was necessary to include tools, techniques
and methodologies for each level in order to pass from one maturity level to the next one.
At the end of this stage, a draft of the S(CM)2 was obtained. The objective of the final
stage was to validate the S(CM)2 draft obtained in the second stage.
The first two stages of the methodology included a Delphi method as a research tool,
running two rounds at each stage. The third stage included a comparison among the
S(CM)2 and other models, a case study and a pilot improvement process. Figure 17,
summarizes the methodology described.
58
The detailed methodology for each one of these stages is described in the next
paragraphs.
3.3 DETAILED DESCRIPTION OF STAGE I
Figure 18 shows a detailed diagram flow for this stage. The next paragraphs describe
steps one through fourteen.
59
1. Review supply chain definitions. There are many supply chain definitions in the
literature. Selecting one of them as a starting point may bias the experts answers
about the supply chain related questions. Even though this research does not have the
60
objective of finding a universal supply chain definition, this stage asked to a set of
experts for a definition of supply chain in order to provide a common ground.
2. Define the number of maturity levels in the model. The literature shows that there are
frameworks and models which use different numbers of maturity levels. The CMM
uses five levels (Murugappan and Kenni, 2003). The CMM evolved into CMMI,
which uses five levels in the representation of stages and six levels in the continuous
representation (Yoo et al. 2004). Similarly, regarding the supply chain management,
the business process orientation maturity model for supply chain uses five levels
(Lockamy III and McCormack, 2004), whereas the Stevens model uses 4 levels
(Stevens, 1989). Considering these models, the S(CM)2 is integrated by 5 maturity
levels named Initial, Defined, Integrated, Collaborative, and Leading. These maturity
levels are considered as the model life-cycle.
3. Define the draft taxonomy for each maturity level. The CMM levels were derived
from and analogous to the Crosbys Quality Maturity Grid (Gack and Robinson,
2003).
61
first level was defined as poor supply chain development and the last one was defined
as leading in supply chain.
4. Design the Delphi questionnaire. In order to accomplish the objective of this stage,
the initial questionnaire includes only two open ended questions.
1) What is your personal definition of supply chain?
2) What characteristics define each maturity level?
5.
Select a set of experts. This first group of experts provided their judgments about the
key elements what a definition of supply chain should include and the
characterization of each maturity level. Taking into account that the exploratory
nature of the first stage, a group size of between ten and twenty was set. A frequent
assumption is that an expert should be professionally or scientifically qualified and/or
own recognition on the study field (Mullen, 2003). For the purpose of this research,
an expert is defined as anyone with five or more years of experience in supply chain
or related fields as logistics, procurement, or sales.
6. Run the first round of the Delphi survey. Once the experts were selected, the next
step was to send an invitation letter requesting their participation in the research. The
letter included the objective of the research, a brief explanation of how participants
were expected to answer, and the two open ended questions mentioned in step four.
This Delphi study was run in Mexico; thus, most of the experts received the
information personally or by e-mail in Spanish. A translation of the invitation letter
used is shown in APPENDIX 1.
62
7. Data compilation. Once surveys were answered, the data obtained were stored in a
database for future analysis.
8. Data Analysis. The analysis was done using statistical tools and affinity diagrams.
Results are shown and discussed in the next chapter.
9. Integrate a draft supply chain definition and improve the taxonomy.
This step
integrates a draft definition of supply chain. This definition summarizes the answers
provided by the experts in the first round of this stage, regarding what they
understood by Supply Chain. The supply chain definition generated is the following:
Supply chain is a network of enterprises, which integrates all processes from the
supply and procurement of raw materials to delivering a finished good. The supply
chain involves all processes oriented to improve logistics and productivity.
Even though providing a supply definition is not an objective of this research, this
one was used to define a context for the experts. The definition was improved
through stages I and II.
10. Design the second round of the Delphi survey. The second questionnaire included the
draft definition shown in the last step and the list of key factors identified from the
experts answers. The definition was improved and validated through two different
types of questions. The first one ranks the definition agreement using the Likert scale
and a second one was an open ended question about what elements were missing in
the definition. A different section requests ranking the relevance of the key factors in
each maturity level and an open ended question about the characterization of the
level. A translation of this second survey is shown in Appendix 2.
63
11. Run the second round of the Delphi survey. The surveys were sent personally or by
email to the experts. The surveys were sent to the same set of experts of the first
round even though some of them had not returned the first survey.
12. Data compilation: Once surveys were answered, the data obtained were stored in a
database for future analysis.
13. Data Analysis. This analysis was done using statistical tools and affinity diagrams.
The results from this round are shown and discussed in the next chapter.
14. Survey Conclusion. Once the analysis is done, it is possible to conclude about the
findings reached in the stage. These are deeply discussed in the next chapter.
3.4 DETAILED DESCRIPTION OF STAGE II
This stage has several objectives. The first one is to validate the definition and
characteristics of each maturity level. The second one is to identify the tools, techniques,
and methodologies available to pass from one level to the next one. Finally, the last
objective is to improve the supply chain definition, which is only a contextual reference
in the model. Figure 19 shows a detailed diagram flow for stage II.
The numbering continues from the last step number in stage one, in a way that this
stage includes steps fifteen to twenty eight. Notice that the darker boxes imply post
analysis and improvement activities based on the Delphi results. The lighter boxes belong
to the Delphi method such that they are the same as the used in the previous stage.
64
65
Supply Chain is a system which manages and controls the use of facilities, processes,
resources, and supplies in order to improve the logistic productivity in the enterprise. All
the processes of the supply chain system have the objective of promoting products and/or
services with value to their customers. This goal is achieved through the coordination
among all the supply chain stakeholders. All supply chain processes are based on the
knowledge and satisfaction of the customer requirements regarding quality, time
response, cost, flexibility, and innovation.
16. Compilation of a list of characteristics for each level. These characteristics were
obtained by summarizing the results from stage I regarding the elements which define
each taxonomy level.
17. Define each maturity level. Based on the characteristics found in the last point, it
generates a draft definition for each maturity level.
18. Design the first Delphi survey for the second stage. Considering the objectives of the
stage, the survey should include open ended questions oriented to identify the tools,
techniques and methodologies available to improve the supply chain, further
validation of the questions using the Likert scale oriented to ask for acceptance of the
maturity levels and a definition of supply chain. The final design includes three
questions related to the supply chain definition, five questions related to the maturity
levels, one for each level, and five open ended questions related to the possible
improvement solutions, one for each level. The survey is shown in Appendix 3.
19. Select the set of experts. Since one of the objectives of this stage is to validate the
maturity level taxonomy, it was convenient increased the set of experts, including a
66
larger spectrum of scopes and interests, which implies considering a larger number of
candidates to participate in the process.
selected, the next step was to sent an invitation letter requesting their participation in
the research. The letter included the objective of the research, a brief explanation of
how the participants were expected to answer, and the open ended questions
mentioned in step eighteen. Appendix 3 shows a translation of this invitation letter.
21. Data compilation: Once surveys were answered, the data obtained were stored in a
database for future analysis.
22. Data Analysis. This analysis was done using statistical tools and affinity diagrams.
The results from this round are shown and discussed in Chapter 5.
23. Create a list of possible solutions to improve the supply chain. After analyzing the
results from the first round in this stage, it is necessary to compile a list of all the
possible solutions provided by the experts to improve the supply chain at each level.
This list will be validated and improved in the second round by the same experts.
24. Design the second round Delphi survey. Considering the information obtained in the
first round, the original questionnaire was modified including the additions to the
draft definition of each maturity level, generated from the first round of answers.
Once the modifications were made, the experts were consulted again using the second
Delphi survey. The number of questions used in this round increased, due to the need
of validating some discrepancies obtained from the affinity diagrams regarding the
67
tools, techniques, methodologies etc. available to improve the supply chain processes.
For example, some of them appeared on several levels; thus, it was necessary to
define a single level or to consider them useful in more than one level.
25. Run the second round of the Delphi survey. The surveys were sent personally or by
email to the experts. The surveys were sent to the same set of experts even though
some of them had not returned the first survey.
26. Data Compilation: Once surveys were answered, the data obtained were stored in a
database for future analysis.
27. Data Analysis. This analysis was done using statistical tools and affinity diagrams.
The results from this round are shown and discussed in the next chapter.
28. Survey Conclusion. Once the analysis is done, it is possible to conclude about the
findings reached in the stage. These are in depth discussed in Chapter 5.
3.5 DETAILED DESCRIPTION OF STAGE III
The objectives of this stage were to: 1) define the S(CM)2 model, 2) verify and
validate the S(CM)2 model and 3) define an assessment tool based on the S(CM)2. Figure
20 shows a detailed diagram flow for this stage. The numbering continues from the last
step number in stage two, such that this stage includes the steps from twenty nine to thirty
nine.
29. Views and abstraction level definition.
68
represent the model as a matrix of explicitly differentiable elements over the model
life-cycle.
69
31. Include tools to pass through levels. Identifying key improvement elements is not
good enough to achieve improvement. The model requires a set of tools, techniques,
and methodologies useful to pass from one maturity level to the next one. These
tools, techniques, and methodologies came from the experts responses obtained after
applying the Delphi survey.
32. Define the S(CM)2. Having completed the two previous steps, the model was built.
The maturity levels as the model life-cycle, the views, the abstraction levels, the key
improvement factor, and the tools compose the whole S(CM)2 meta-model.
33. Verify the Model. Once the model was built, the following step was to verify its
conceptualization through a comparison with the models reviewed in Chapter 2.
34. Run a case study to validate the Model.
validated as a diagnostic tool through the application of a case study. This case study
describes a couple of enterprises, so that the participants in the study identify the
maturity level of the enterprise.
35. Validate the model through interviews with experts. A different validation process
was run in parallel to increasing the confidence in the model. This validation was
done through interviews with experts in the supply chain field. Their comments, and
responses were analyzed to define strengths, weaknesses, and future research related
to the model.
36. Compile validation results.
70
37. Future work and possible improvements. This step implies documenting the findings
obtained from steps 34 and 35.
38. Define an assessment tool. Once the S(CM)2 was finished, this step defines and
designs an assessment tool, which is useful to create an improvement path for the
enterprise.
39. Model generalization. Finally, the model should have a universal way to be defined.
The last step proposes a general supply chain performance classification, useful to
provide a common language for future works related to this model. This classification
is similar to the one used to classify waiting lines in the queue theory analysis.
The following chapters describe the results obtained after applying the methodology
discussed in this chapter.
71
CHAPTER IV
STAGES RESULTS
This chapter summarizes the findings obtained from the Delphi method during stages
one and two of the research methodology. These results are the foundation of the S(CM)2
since they provide the taxonomy of the model, the key improvement factors in a supply
chain, and a set of tools required to reach the next maturity level in the model. The
results are presented in chronological order; thus, the information about the qualifications
of the experts is shown before the main results for each stage are stated.
4.1 QUALIFICATION OF THE EXPERTS FOR STAGE I
Eighteen experts were invited to participate in the research process. The participants
were selected from a list of personal contacts previously obtained. All the experts had at
least five years of experience in supply chains or a related area such as logistics, sales, or
procurement. Since a supply chain may be defined in several ways depending on the type
of business, this set of experts represents different types of businesses. This assortment
covers a wide kind of input about what a supply chain should be. The participants were
in the industries listed in Table 2:
Regarding their academic qualifications, all the experts hold at least a BA or a BS
degree, six of them hold a masters degree and one hold a PhD. The experts are related to
the supply chain from different positions, such as logistics, processes engineering or
production planning. Table 3 shows the position of the experts consulted.
72
Academy (3)
Professor (3)
Consultant (3)
The second round was focused on improving the supply chain reference
definition, and to prioritizing the set of key improvement factors obtained in the first
round. Also, the experts added any other key factors missing from the first round. Table
4 summarizes the main findings in this stage.
73
Round Two
4.2.1
The experts were asked about the characteristics a supply chain should have
according to the following taxonomy. Level one: This is an enterprise with poor supply
chain development, Level five: This is a leading enterprise in the market.
The
intermediate levels were set free to be defined by the answers of the experts. The
characteristics collected were used to create a definition for each maturity level. This
final result was used in the stage II as the starting definitions for each maturity level.
Table 5 shows some of the results obtained for each maturity level.
Table 5: Characterization of each Maturity Level
Maturity Level
Characteristics
One
Two
74
Maturity Level
Characteristics
Three
Four
Five
These results highlight an enterprises internal integration processes from levels one
to three. Level four starts with the collaboration with other enterprises and the growth of
partnerships and alliances. Finally, level five describes a leading enterprise in the market,
with a strong focus on product development, innovation, research, customer satisfaction,
integration of suppliers, and a very attractive working environment. Considering these
descriptions, the maturity levels are labeled as: Undefined, Defined, Manageable,
Collaborative, and Leading.
75
4.2.2
A very interesting result was the list of supply chain improvement factors. These
were mentioned by the experts as key factors to attain the level proper of an outstanding
supply chain. The first round of this stage collected twenty seven factors. These factors
are shown in Table 6.
Table 6: List of Key Improvement Factors
1. Company Objectives, vision
and mission
2. Cost
3. Customer requirements
4. Customer Service
5. Defects/reworks/scrap
6. Demand Forecasting
7. Demand Management
8. Enterprise Policies
9. Inventory Management
10. ISO
19. Product
11. KPI
21. Production
13. Logistics
22. Quality
16. Procedures
25. Shipping
26. Suppliers
27. Warehousing
Even though some of these factors could be similar, or overlap functions or processes,
none were eliminated. The reason was to discriminate or specify as much as possible a
prioritized list of improvement factors. In order to determine the relevance of each factor
in each maturity level, the second round of the Delphi survey asked to select from the list
shown in Table 6 the most important factors for each level. Table 7 shows the percentage
times each factor was mentioned. The shaded cells are the three largest percentages for
each level.
These percentages represent the number of times that a particular improvement factor
was recognized as relevant in every maturity level. For example, the answers of the
76
experts included at most eighteen mentions; fifteen of them remarked the product as key
improvement factor for this maturity level. Thus, the final list was obtained considering
those factors, which received at least the fifty percent of approval. Intending to provide a
more clear description for these factors, some additional information was added to them.
Table 8 shows the key factor for each maturity level.
Table 7: Prioritization of Improvement Factors for Maturity Level
Improvement Factor
Level 1
Level 2
Level 3
Level 4
Level 5
17%
22%
50%
17%
11%
Cost
56%
44%
44%
39%
50%
Customer requirements
67%
50%
67%
78%
56%
6%
28%
56%
6%
67%
44%
6%
6%
11%
11%
6%
Customer Service
Defects/reworks/scrap
50%
Demand Forecasting
Demand Management
33%
28%
6%
17%
Enterprise Policies
11%
50%
11%
39%
89%
39%
17%
50%
Inventory Management
44%
ISO
KPI
44%
39%
61%
17%
33%
39%
6%
6%
22%
56%
67%
67%
Optimization processes
33%
6%
6%
Organization structure
39%
6%
44%
78%
33%
33%
50%
17%
39%
61%
6%
22%
67%
17%
11%
22%
50%
6%
Lead Time
Logistics
Procedures
39%
33%
Process Capability
Processes Synchronization
39%
39%
Product
78%
Product Distribution
11%
Production
83%
44%
33%
61%
28%
Quality
44%
67%
72%
78%
67%
33%
Response Time
17%
17%
17%
56%
44%
Shipping
28%
28%
39%
17%
Suppliers
28%
56%
28%
6%
Warehousing
28%
11%
44%
33%
77
22%
Undefined
Defined
Manageable
1. Development of procedures and control rules over all the enterprise processes;
2. Focus on Quality improvements; 3. Focus on Customer requirements; 4.
Optimization of inbound and outbound logistics processes; 5. Evaluation and
actualization of the enterprise objectives, vision, mission; 6. Evaluation and
actualization of the enterprise policies.
Collaborative
Leading
These findings were considered to design the second stage of the research. The main
results obtained from this second stage are presented in the next two sections.
4.3 QUALIFICATION OF THE EXPERTS FOR STAGE II
Eighty experts were invited to participate in this research process. The sample size
was increased in this stage due to the need to validate the maturity levels. Unfortunately,
only seventy experts participated in the study.
participants were selected from a list of personal contact information. All the experts had
at least five years of experience on supply chain or a related area such as logistics, sales,
78
or procurement. The average experience of the experts consulted was of twelve years.
Table 9 shows the distribution of the years of experience of the participants in stage II.
Table 9: Experts Years of Experience
Years of Experience
Number of Experts
Percentage
5 to 9
29
41%
10 to 14
18
26%
15 to 20
10
14%
20 to 25
10%
More than 25
9%
Total
70
100%
The increase in the size of the set of experts consulted allowed to include more types
of businesses than in stage one. Since the S(CM)2 is a supply chain reference model, the
more types of business represented, the more representative the sample was. Table 10
shows the type of businesses included in the Delphi study.
Table 10: Type of Business Represented in the Stage II
Academy (4)
Construction (2)
Customs (1)
Automotive (3)
Newspapers (1)
Beverages (9)
Clothes (1)
Computers (1)
Furniture (3)
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Consultant (7)
Professor (4)
Observe that, the 64% of the positions represented (45/70) are managers, who are the
most probably users of this mete-model.
4.4 SUMMARY OF THE RESULTS FOR STAGE II
After defining the sample of experts to be consulted in the second stage, the experts
received an invitation letter either by email or personally, which contained the
explanation about the research and the role they played.
answered the first and second rounds of the Delphi survey in this stage. The first round
was focused on validating the definition of each maturity level and the supply chain
definition used as a starting point for this second stage.
The supply chain maturity level definitions were built considering the characteristics
described in Table 5, the improvement models proposed by Crosby in his Quality
Maturity Grid, and Stevens in his Supply Chain Integration Model. Thus, the first
maturity levels imply a poor knowledge about supply chain (undefined & defined). The
80
intermediate level is focused on transforming the attitude and understanding of the supply
chain, such that the enterprise reaches an internal integration (Manageable). The final
stages imply the understanding and recognition of management about the supply chain
processes as an essential part of the companys systems.
(Collaborative) represents the start of the external integration among suppliers, enterprise,
and customers.
81
productive processes are focused on completing the customer orders; however, they may
experience frequent problems in meeting customers expectations; the enterprise does not
have a defined vision or mission.
The experts indicated their agreement level through a Likert scale, which was defined
as: Strongly agree, moderately agree, neutral, moderately disagree, and strongly disagree.
Due to the wide conceptualization of a supply chain discussed previously, the eighty
percent of agreement is considered a minimum boundary for validation purposes.
According to the Likert scale, the Strongly Agree and Moderately Agree options should
accumulate at least 80% of the answers. Figure 21 shows the validation results for this
level. Analyzing the results, the 47% of the answers were Strongly Agree and 40 % of
the answers were Moderately Agree, which implied an 87% of acceptance.
40
Answer Frequency
35
Undefined Level
33
28
30
25
20
15
10
0
Strongly
Agree
Moderately
Agree
Neutral
Agreement level
Moderately
disagree
0
Strongly
disagree
82
83
40
Defined Level
Answer Frequency
35
30
32
27
25
20
15
10
5
0
Strongly
Agree
Moderately
Agree
Neutral
Agreement level
Moderately
disagree
Strongly
disagree
84
improvement plans with special focus on process documentation and standardization; the
personnel is induced to an organizational culture oriented to customer satisfaction and
personal development; there are closer negotiations with suppliers regarding policies,
times and costs; the improvement process applied a set of tools or techniques instead of a
single one; there are isolated information systems useful to measure, control, and make
decisions oriented to processes improvement.
Figure 23 shows the validation results for this level. Analyzing the results, 56% of
the answers were Strongly Agree and 33 % of the answers were Moderately Agree,
Answer Frequency
39
Manageable Level
23
Strongly
Agree
Moderately
Agree
Neutral
Agreement level
Moderately
disagree
Strongly
disagree
85
Kanban, JIT concepts, Lean tools; Statistical Process Control, Statistical Analysis;
classify source and outsource processes; use specialized software i.e. MRP, ERP, etc.;
use process standardization tools such as flow diagrams, process documentation,
auditing, etc.; obtain quality certifications and awards; make strategic alliances with
suppliers and other enterprises; analyze customer satisfaction periodically; optimize tools
such as Linear and Integer Programming; Analyze tools such as Simulation, Design of
Experiments; deploy continuous improvement programs; implement Decision Support
Systems; and provide training based on functions and skills required.
4.4.7 Validation of the Maturity Level: Collaborative
The following definition for the Collaborative level was sent to the experts:
Maturity Level: Collaborative. An enterprise at this level has defined collaboration
strategies oriented to integrate customers and suppliers; there is clear orientation to
satisfy the customers expectations; there are several improvement processes related to
the knowledge of customers needs; there are integrated information systems, which
provide a technological platform for data exchange among suppliers, company, and
customers, generating key information about the market and the competence; there are
several measurements and evaluation related to the suppliers performance; there is a
better selection of suppliers; the enterprise uses more complex improvement processes
due to the holistic project focus; there is in depth knowledge of all the enterprises
processes. Figure 24 shows the validation results for this level. Analyzing the results,
57% of the answers were Strongly Agree and 34 % of the answers were Moderately
Agree, which implies 91% of acceptance.
86
Answer Frequency
45
40
35
30
25
20
15
10
5
0
40
Collaborative Level
24
Strongly
Agree
Moderately
Agree
Neutral
Agreement level
Moderately
disagree
Strongly
disagree
87
Answer Frequency
43
Leadership Level
23
4
Strongly
Agree
Moderately
Agree
Neutral
Agreement level
Moderately
disagree
Strongly
disagree
88
89
CHAPTER V
THE SUPPLY CHAIN CAPABILITY MATURITY MODEL
The previous chapter described how the Delphi method was used to assess a supply
chain from different perspectives in regards the maturity level taxonomy. Also, the
answers obtained from the Delphi method allowed to collect a set of reference actions
performed by enterprises to improve the supply chain, which described the characteristics
of several supply chain elements from different points of view. The maturity level
taxonomy and these reference actions are related among them, jointly represent a
snapshot of a supply chain process through two different scopes. Additionally, a third
element was the set of prioritized Key Improvement Factors for each maturity level,
which provided information about key supply chain elements for each maturity level.
Thus, this chapter describes how to integrate these three elements in a meta-model, the
S(CM)2.
5.1 DEFINITION OF THE VIEWS AND ABSTRACTION LEVELS IN THE S(CM)2
Considering the findings obtained from the Delphi survey and based on the models
described in Chapter 2, the information is integrated through a set of views and
abstraction levels. The views collectively describe and clarify the complex activities of a
supply chain system. The abstraction levels are the time perspectives for each view,
which are used to determine the supply chain business activities through time, to meet the
maturity level requirements. As a result of this arrangement, views and abstraction levels
integrate a matrix of clearly differentiable supply chain elements.
90
The views were defined through an analysis of the results obtained from the previous
two stages. From the first stage, the whole set of characteristics provided by the experts
to define a supply chain, and from the second stage, the maturity level definitions
validated by the experts.
91
reference actions, which add value to the product or service, such as reduction of
defects, scrap, and reworks; documentation and standardization of functions and
processes; internal logistics issues; deployment of projects to reduce the lead
time; implementation of production planning strategies etc.
3. Inventory: This view encloses all the reference actions related to the inventory
management and control. Therefore, reference actions related the management
and control of all kinds of inventories such as raw materials, finished goods, work
in process, scrap, spare parts, etc. are included in this view.
4. Customers: The customers view includes all the reference actions in regards to
meeting the customers expectations. Consequently, some of the actions enclosed
in this view are identifying the customer needs; attending the customers
complains; developing customers loyalty to the company products and services;
following up the sale after delivery; implementing projects to increase the
perception of value in the products and services provided by the enterprise etc.
5. Human Resources: The Human Resources view contains the reference actions
related to the enterprises employees, their integration in the company and the
work environment. Therefore, in this view are reference actions such as training;
development of a work culture; implementing actions to reduce the employees
turnover; implementing projects to improve the enterprises work conditions;
development of rewarding strategies etc.
6. Information Systems & Technology: This view encloses the reference actions
directly linked to the development and implementation of information systems,
92
and the technology management processes. Some of the actions included in the
view are evaluating and implementing technological solutions such as ERP
systems, RFID solutions, Warehousing Management Systems; automated
equipments and so on; documenting and standardization of the data collection
process; implementing projects to reduce the down times in the information
systems and equipments of the enterprise etc.
7. Performance Measurement Systems: This view comprises the reference actions
oriented to measure the enterprises performance regarding processes, functions,
and employees. Thus, some of the reference actions enclosed in this view are
defining the enterprise KPIs; defining the periodicity of the information analysis
concerning the performance of a process, function or employee; communicating
to the employees the meaning of each performance indicator, and how to calculate
it; standardize the use and presentation of the performance indicators and so on.
Regarding the abstraction levels, there are three common perspectives used to plan
and analyze the supply chain business activities, these perspectives are namely
operational, tactical, and strategic. According to several supply chain experts, these
perspectives are required to develop the integration of a marketing channel, which is one
of the main goals of this model (Svensson, 2002). The operational perspective considers
those activities that should be done in a long time period, generally during more than one
year. The tactical perspective considers an intermediate time horizon; generally less than
one year. Finally, the operational perspective considers short-range activities, which
should be done in hours or days (Ballou, 2004). The resulting matrix of integrated views
and abstraction levels is shown in Figure 26.
93
Abstraction Levels
Operational
Tactical
Strategic
Suppliers
Production
Systems
Views
Inventories
Customers
Human Resources
Information
Systems
Technology
&
Performance
Measurement
Systems
framework includes the definition of the maturity level, the key improvement factors
94
sorted by priority, the matrix of supply chain reference actions, and a set of useful tools to
improve the supply chain, for the next maturity level to be reached.
Maturity
Level
Key Improvement
Factor
View
Abstraction Level
Operational
Tactical
Strategic
Useful
Tools
Suppliers
L
e
v
e
l
n
a
m
e
D
e
f
i
n
i
t
i
o
n
Production
Systems
Inventory
Customers
Human
Resources
Information
Systems /
Technology
Performance
Measurement
System
95
96
2. Review the
Catalog of Products
1. Document
Production
Processes
Key
Improvement
Factor
Production
Suppliers
View
Performance
Measurement
System
Maturity Level
Tactical
Identifying key elements to define the policies to
select suppliers
Operational
Identifying problems related to raw materials
procurement
Identifying the heart of the matter about the high
levels of defects, scrap, and rework in the
products
Abstraction Level
97
1. Document
Production
Processes
Key
Improvement
Factor
Suppliers
View
Performance
Measurement
System
Production
2. Review the
Catalog of Products
This is an enterprise with no
process documentation or
standardization; there is a lack of
knowledge about the enterprise
processes, activities, and tasks; the
3. Focus on
enterprise primarily reacts to the
Customer
Inventory
environment instead of planning;
U
requirements
the enterprise remains in the
n market by a small advantage on
d sale price, location, or customer
e relationship in comparison with
the competition; there is no
f
continuous improvement plan
4. Focus on cost
i
Customers
reduction
n defined; all the improvements are
reached by individual and isolated
e
efforts; the productive processes
d
are focused on completing the
customer orders; however, they
Human Resources
may experience frequent problems
5. Reduce defects /
in meeting customer's
reworks / scrap
expectations; the enterprise does
not have a defined vision or
Information
mission.
Systems /
Technology
Maturity Level
Useful Tools
Strategic
Abstraction Level
98
Objective
GIM
Analyzes the
current production
systems. This
diagnosis allows to
design alternative
system conceptions
and to support their
understanding
CIMOSA
PERA
S(CM)2
Represents an
enterprise system
from a general to a
particular model
passing through
partial models for
every view
Defines a
hierarchical
arrangement, such
that the
dependency on the
human
understanding,
judgment, and
decision making
required for a
success
implementation is
minimized
Provides a crossdisciplinary
perspective of an
enterprises supply
chain performance
99
Element
Focus
GIM
Emphasizes the
organizational
structure of an
enterprise and the
associated
decisional system
of production
systems
CIMOSA
PERA
S(CM)2
Facilitates the
description
modeling of an
enterprise operation
based on a processoriented modeling
approach
Recognizes the
relevance of the
human judgment
and decision
making to merge
special
management
requirements, such
as innovation and
creativity into
design
Identifies
assessment
opportunities in
supply chain
processes, and
provides the tools
required to define
an enterprises
improvement road
map
Views
Informational,
decisional,
physical, and
functional
Function,
Information,
Resource, and
Organization
Manufacturing,
Human and
Organizational, and
Information
Suppliers,
Production
Systems, Inventory,
Customers, Human
Resources,
Information
Systems and
Technology, and
Performance
Measurement
Systems
Abstraction
Levels
Conceptual,
Structural, and
Realizational
General Model,
Partial Model, and
Particular Model
Not Specified
Operational,
Tactical, and
Strategic
Analysis, Design,
and
Implementation
Identification,
Concept,
Definition,
Functional Design,
Detailed Design,
Construction,
Operation and
Maintenance,
Renovation or
Disposal, and Legal
Dissolution
Undefined,
Defined,
Manageable,
Collaborative, and
Leading
Life-cycle
Analysis, Design,
and
Implementation
Considering this table, the S(CM)2 meets the characteristics used for these reference
models to describe an enterprise system or process. Even though GIM, CIMOSA, and
PERA are reference models for other study fields, it is possible to conclude by similarity
that the verification of the S(CM)2 is done regarding a reference model framework.
On the other hand, due to the particular application of the S(CM)2, it is necessary to
make a comparison with some supply chain models or other models from a supply chain
100
related field. Considering the supply chain models reviewed in Chapter 2, only the
SCOR model is useful to make the comparison, since it is the only one defined as supply
chain reference model.
However, SCOR does not offer a step-by-step procedure to improve the supply chain
as the one presented in the S(CM)2 model. Also, according to the Supply Chain Council,
SCOR does not include: Sales administration processes, technology development
processes, product and process design and development processes, and some postdelivery technical support processes. Besides, SCOR assumes but does not explicitly
address: training, quality, and information technology (IT) administration (non-SCM).
These elements are explicitly included in the S(CM)2 model. Moreover, the S(CM)2
includes the human resource element as a view, which is not considered as a key element
in the SCOR model. Regarding similarities, SCOR defines five decision areas named
Plan, Source, Make, Deliver, and Return, while the S(CM)2 represents these decision
areas through the key improvement factors, views and the supply chain reference actions.
The S(CM)2 explicitly includes reference actions concerning planning elements through
the model (Plan); procurement and supplier collaboration (Source); production actions
(Make); and inbound and outbound logistics optimization (Delivery and Return).
Searching for a model from a related supply chain field, there is a model from the
value chain field. The value chain is defined as the enterprise's value system, which
means the value system that creates the products value to the customer (White and
Pearson, 2001). Thus, the value chain definition overlaps with the supply chain of a
company. A classic model from this field was developed by Porter (1985); he defined
101
two kinds of activities in the value chain, primary activities (Inbound Logistics,
Operations, Outbound Logistics, Marketing and Sales, and Service) and support activities
(Procurement, Technology Development, Human Resource Management, and Firm
Infrastructure). Figure 31 shows the model graphically.
Procurement
Technology Development
Human Resources Management
Firms Infrastructure
Inbound
Logistics
Operations
Outbound
Logistics
Marketing
and Sales
Service
Inbound
Logistics
Porters Model
S(CM)2
102
Porters Model
S(CM)2
Operations
Outbound
Logistics
Marketing and
Sales
Service
Firm
Infrastructure
Human
Resources
Management
Technology
Development
Procurement
Activity
103
104
The invitation was made to ten experts; each of them received an email containing
three files. The first file was a Powerpoint presentation containing the invitation and the
explanation of the model, the second file was the model itself, and the third file was a
survey shown as a verification sheet, which included three questions to validate the
model. Appendix 6 shows the validation sheet sent to the experts. Until the publishing
time of this research four of them had answered the validation sheet. Table 14 shows the
information related to the credentials of these four participants.
Table 14: Information of the Experts consulted to Validate the S(CM)2
Years of
Experience
Position
Business Type
Academic
Credentials
15
Consultancy
Master in
International
Law
14
Consultancy
PhD in
Industrial
Engineering
11
Academic
PhD in
Industrial
Engineering
10
Planning Manager in an
automotive enterprise
Automotive
BSc in
Industrial
Engineering
Participant
Concerning the questions included in the verification sheet, these were as follows:
Q.1 What advantages can you identify in the model?
Q.2 What improvement opportunities can you identify in the model?
105
Q.3 This model was developed to assess the processes in a supply chain and to define
Yes/No/Why?
Table 15 summarizes the results for each question
Table 15: Answers Obtained Through the Validation Sheet
Question
Answers
Provides a step by step improvement process
May be used by any size of company
Takes control of the improvement process since the beginning
Considers the customer needs even though the model is not based on the
customers
Advantages
Improvement
Opportunities
The model needs to increase its references to strategic concepts such as the
development of a distribution net, the use of transportation modes, Less than
Truckload (LTL), Truckload (TL), intermodal, and so on.
Consider including international trade constraints such as customs duties
Prioritize the useful tools or linked to each view and abstraction level
Increase the information about the tools and how to deploy them in the enterprise
Yes, The model provides a clear set of reference actions, which are useful to
assess the supply chain processes. Moreover, the model is oriented to motivate
the human resources to excel themselves through creativity and innovation, first
of all internally in the enterprise and then externally as leaders in the market
Yes, because the model provides a reference, which helps to assess and improve
the supply chain processes
Yes, the model is useful to assess and improve the supply chain processes.
Yes, the model helps to assess the supply chain processes and define an
improvement path to reach the next maturity level.
106
Even though the model shows some improvement opportunities, the four experts
agree that the S(CM)2 meets both goals, to assess the enterprises supply chain processes
and to define an improvement road map. Moreover, some of the advantages mentioned
by the experts are key design objectives for the S(CM)2. For instance, provides a step by
step improvement process and a model easy to understand, both characteristics allows to
conclude the S(CM)2 contributes to the state of the art of supply chain modeling since
other models do not offer a step by step improvement process or the models do not use an
appropriate language for the supply chain. Regarding to the improvement opportunities,
it was actually expected being this is the first version of the S(CM)2, these improvement
can be explored with greater detail in future work.
5.4.2 Case Study Results
The case study was done to demonstrate the easiness of the S(CM)2 used as an
assessment tool. To accomplish this goal, the validation instrument selected was a case
study. The case study contains a brief explanation about the views and maturity levels of
the model, the definition of the maturity levels, a set of instructions to answer the case
study, the descriptions of the as-is states of two different fictitious enterprises named X
and Y, and a table of results.
The as-is state of each enterprise was built using randomly the reference actions
defined in the S(CM)2 for each view. For example the description of the as-is state of
enterprise X includes the following paragraph:
The management has remarked the need to improve the customer service activities;
thus, some improvements have been made to reach this objective, such that, it has
107
Customers
Identifying the functions of a customer service Defining the functions of a customer service
department or, at least, someone responsible department or, at least, someone responsible
for customer relationships
for customer relationships
Deploying actions to integrate the enterprise's
Deploying cross departmental efforts to reduce internal processes and to share information
costs and to assure quality
about customer's behavior within the
enterprise's functions
Applying basic tools to improve the customer's Applying tools to improve customer product
perception of value such as the fishbone
and service satisfaction such as FMEA,
diagram, histograms, Pareto charts etc.
Kaizen, focus groups, etc
The tables of results collected from the participants have the classification they
provided for each view, according to the maturity level description. Appendix 7 shows
the format used in the case study and Table 16 shows the expected answer for each view
for both, Enterprise X and Enterprise Y.
Table 16: Expected Answers for the Case Study
View
Suppliers
Production
Inventories
Customers
Human Resources
Information Systems and Technology
Performance Measurement Systems
Enterprise X
Defined
Manageable
Undefined
Manageable
Undefined
Defined
Defined
108
Enterprise Y
Collaborative
Defined
Manageable
Defined
Collaborative
Collaborative
Manageable
The participants did not require having experience in supply chain or to know the
model, since the meta-model may be used by anyone interested in assess and improve the
processes in a supply chain. Thus, the case study was sent by email to twenty-five
possible participants.
The number of
x - E ( x)
s
[1]
Regarding the statistical significance of the test (), it was set to 5% such that Ho
cannot be rejected if
t 0.025,13
x - E ( x)
t 0.975,13
s
n
[2]
109
Thus, Table 17 shows the results obtained from the fourteen participants
Table 17: Results of the Case Study
Participant
1
2
3
4
5
6
7
8
9
10
11
12
13
14
S
2
2
4
2
2
2
2
2
2
2
2
2
3
2
P
3
3
4
3
3
3
3
4
2
3
4
3
4
4
Avg
std dev
0
t=
t0.025,13 =
Result
2.21
0.58
2
1.38
2.16
OK
3.29
0.61
3
1.75
2.16
OK
I
1
1
2
1
1
1
1
1
1
1
1
1
1
1
Enterprise X
C
HR IS&T MS
3
1
2
1
2
1
3
2
2
2
2
2
4
1
1
2
2
1
2
2
2
1
2
1
2
1
2
2
3
1
3
2
3
1
2
1
2
1
2
2
2
1
2
2
3
1
3
2
2
1
3
2
4
1
2
2
S
5
5
4
5
3
4
4
4
4
3
5
3
4
5
P
2
1
3
1
2
1
2
2
2
2
2
2
1
2
I
4
4
3
5
3
2
4
3
3
3
3
3
4
3
Enterprise Y
C
HR IS&T MS
1
5
5
3
1
5
3
4
3
5
4
3
1
4
5
2
2
4
3
2
1
5
4
2
2
4
4
2
2
5
5
2
1
3
4
3
1
4
3
2
2
4
4
3
2
4
4
2
2
4
5
4
2
4
5
4
4.14 2.71
0.77 0.83
4
3
0.69 -1.30
2.16 2.16
OK OK
Considering the results, it is possible to argue that the easiness of classifying the
model views and reference actions was validated, since the average of the answers
obtained is statistically equal to the expected average value 0. Moreover, there is a key
finding from this validation process related to the relevance of providing an assessment
methodology, which shows step by step how to use the S(CM)2 to assess and improve the
supply chain processes in the enterprise. This argument comes from the distribution of
answers obtained from the case study, which showed how many answers were the same
as the reference values. Table 18 shows these distributions.
110
86%
7%
7%
7%
57%
36%
Enterprise X
I
C
HR IS&T MS
93%
93% 7% 21%
7% 57% 7% 64% 79%
29%
29%
14%
1
21%
43%
36%
4
P
29%
64%
7%
Enterprise Y
C
HR IS&T MS
43%
7% 50%
50%
57% 7%
7% 21% 29%
29%
57% 43% 21%
7%
36% 36%
3
2
4
4
3
I
Analyzing Table 18, it is possible to see that only the view customer of Enterprise X
has a mode different from the reference value. This fact is minimized since the mode of
the customers view is the immediate lower level, implying an improvement road map
starting from a lower point, and eventually, enclosing improvement processes until the
third maturity level.
On the other hand, for the Production and the Information Systems & Technology
views in the Enterprise X description, and for the all the views, except Customers, in the
Enterprise Y description, at least four participants classified the view in a higher maturity
level. A possible explanation for these results was lack of information and training
received by the participants before answering the case study. The case study only
considered the definitions of the maturity levels, and some of the reference actions
instead of the whole set of reference actions, which helped to classify the views more
accurately.
5.5 THE PILOT TEST OF THE S(CM)2
The final validation process was assessing a real enterprises supply chain. The
assessment process requires completing a questionnaire shown from Table 19 to 25. This
questionnaire helps managers to obtain the maturity level classification for each view in
111
the S(CM)2, since the questions was developed based in the reference actions of the
model.
Thus, the questionnaire has seven sets of questions; one set by view, this
arrangement was based on the assessment tool used by the CMMI. Also, each question
was numbered according to the maturity level for each view. The possible answers for
each question are yes or no. In case the answer will be yes the enterprise should
document the evidence which support the affirmative answer. A negative answer in one
of the level questions implies an improvement opportunity such that the expected level
characteristics are not meet. Thus, the enterprise receives a maturity classification of the
last level completed.
based in the reference actions and the tools recommended in the model. Once the level is
complete the enterprise may continue improving its processes from this maturity level to
the next level up to reach the leading maturity level.
In order to perform the assessment, an enterprises manager was selected from a
contact list. Regarding the enterprises information, it is as follows.
Business type: Metallic Stamping and Sheet Metal
Contact position: Operations Manager
Number of years in the current position: 5 years
Number of years in the enterprise: 9 years
The following set of questions shown in Table 19 was used to assess the enterprises
supply chain processes according to the suppliers view. By confidential purposes, the
name of the enterprise and the evidences documented were omitted.
112
Questions
S.1
Undefined
S.2
S.3
Defined
S.4
S.5
S.6
S.7
Manageable
S.8
S.9
S.10
S.11
Collaborative
S.12
S.13
S.14
S.15
Leading
S.16
S.17
113
Answer
(Yes/No)
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
No
No
Yes
No
Yes
Yes
No
Evidence
Based in the results obtained, the maturity level of this enterprise for the view
supplier is Defined. Thus, this enterprise should take the reference actions described for
the view suppliers in the level manageable as starting point to define its improvement
path.
answers. In this case, this enterprise should work jointly with the supplier to develop and
to integrate their processes to the enterprises supply chain processes, also to develop,
document and implement policies to select and to hire outsource services. Considering
the useful tools suggested by the S(CM)2, some possible solutions implies integrates the
suppliers processes through a MRP system and to define collaboration agreements with
other enterprises, in this case outsourcing enterprises.
Even though the maturity level classification obtained was defined, there is evidence,
according to the answers obtained from the questionnaire that the enterprise shows
advance in the next maturity levels.
convention implying the improvement urgency, due to an enterprise process which has
not complete at least the defined level represent a poor development levels one and two
are identified by a red color.
Collaborative by a yellow color and the Leading maturity level by a green color. Thus,
the negative answers are identified using these color convention. For instance, the
questions S.8, S.9, S.10, S.11, and S.12 will be marked using the color yellow because
they assess the levels manageable and collaborative, while the questions S.14 and S.17
will be marked using the color green because they assess the maturity level leading.
114
Thus, Figure 33 shows the resulting graph for the suppliers view.
Each axis
P: Production
I: Inventories
C: Customer
H: Human Resources
14,17
10,11,12
8,9
2
1
0
T
Tables 20 to 25 show the results for the other views assessment. Also after each table
there is an example of improvement roadmap for each view.
115
Questions
The main problems related to scrap, defect and
reworks are documented and identified.
There are documents and diagrams which describe in
detail the enterprises productive processes such as
flow diagrams, product flow diagram, operation
diagram, assembly diagrams and so on.
The documents and diagrams provided as evidence in
the last question are known and used by anyone who
needs them.
The main problems related to the processes downtimes
and failures due to the lack of maintenance are
identified and documented.
There are documented and implemented joint projects
with other departments inside the enterprise.
The productive operations and the procedure to assign
tasks are standardized.
Yes
Yes
Yes
P.1
P.2
P.3
Undefined
P.4
P.5
P.6
P.7
Defined
Manageable
Answer
(Yes/No)
116
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Evidence
Answer
(Yes/No)
Level
Questions
Yes
Collaborative
Yes
Leading
Evidence
No
No
No
No
No
No
No
No
No
Yes
Based in the results obtained, the maturity level of this enterprise for the view
Production is Manageable. Thus, this enterprise should improve its supply chain
processes starting by the opportunities detected by the questions P.20 through P.24.
Some recommended actions and tool are the integration of internal production processes
through technological solutions such as RFID, Lean Thinking tools such as value stream
117
Questions
I.1
I.2
I.3
Undefined
I.4
I.5
I.6
I.7
Defined
I.8
I.9
I.10
I.11
I.12
Manageable
I.13
I.14
Answer
(Yes/No)
Yes
Yes
No
118
No
Yes
No
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Evidence
Level
Questions
I.15
I.16
Collaborative
I.17
I.18
I.19
I.20
I.21
Leading
I.22
I.23
Answer
(Yes/No)
Yes
No
Evidence
No
Yes
Yes
Yes
No
No
No
Based in the results obtained, the maturity level of this enterprise for the view
Inventory Systems is Level 0, which means the enterprise has not complete at least the
level Undefined. Thus, this enterprise should improve its supply chain processes starting
by the opportunities detected by the questions I.2 and I.4. Some recommended actions
and tool are Inventory systems strategies such as layout by demand, by product type and
so on, basic office tools to analyze data related to demand, delivery of supplies, 5 S
concepts, documentation and standardization of inventory processes etc.
119
Questions
C.1
Yes
Yes
No
C.2
C.3
Undefined
C.4
C.5
C.6
Defined
Manageable
Answer
(Yes/No)
120
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
No
Yes
No
Evidence
Answer
(Yes/No)
Level
Questions
Yes
Collaborative
No
Leading
Evidence
Yes
Yes
No
No
Yes
Yes
Yes
No
Based in the results obtained, the maturity level of this enterprise for the view
Customers is Undefined. Therefore, this enterprise should improve its supply chain
processes starting by the opportunities detected by the question C.11. Some
recommended actions and tool are the definition of a target market, doing research of
customers' requirements, defining the customer service mission and vision, implementing
focus groups, assessing of customer relationship management solutions, defining the
customer service policies; etc.
121
Questions
H.1
Undefined
H.2
H.3
H.4
Defined
H.5
H.6
Yes
Yes
Yes
H.7
Manageable
Collaborative
Leading
Answer
(Yes/No)
122
Yes
No
No
Yes
No
Yes
No
Yes
No
Yes
Yes
Yes
Yes
Yes
No
No
No
Evidence
Based in the results obtained, the maturity level of this enterprise for the view Human
Resources is Undefined. Therefore, this enterprise should improve its supply chain
processes starting by the opportunities detected by the questions H.5 and H.6. Some
recommended actions and tool are the definition of training requirements, deployment of
strategies to create an enterprise work culture, definition of reward policies and
communication of reward program, definition of career plans for employees and
enterprise's position etc.
Table 24: Assessment Questionnaire for the view Info. Sys. & Technology
Level
Questions
T.1
T.2
Undefined
T.3
T.4
T.5
T.6
Defined
T.7
T.8
T.9
123
Answer
(Yes/No)
Yes
Yes
Yes
Yes
Yes
Yes
No
No
Yes
Evidence
Level
Manageable
Collaborative
Leading
Questions
T.10 There are improvement teams in charge of training
personnel when new technology or information
systems such as ERO; CRM, SRM, etc., are
introduced.
T.11 There is a documented and implemented standardized
process to manage and generate data.
T.12 There are defined and documented strategies to update
and replace technology.
T.13 Projects are deployed to define strategies to integrate
suppliers and customers in the enterprise's information
systems.
T.14 There are improvement processes for ease of access to
information and way in which it is presented to users.
Answer
(Yes/No)
Evidence
Yes
Yes
No
No
No
Yes
No
No
No
No
Yes
No
No
No
Based in the results obtained, the maturity level of this enterprise for the view
Information Systems and Technology is Undefined. Therefore, this enterprise should
improve its supply chain processes starting by the opportunities detected by the questions
T.7 and T.8. Some recommended actions and tool are the definition of technology
requirements to ensure the product flow and the availability of information, the
124
Questions
M.1
Undefined
Yes
Yes
Yes
No
M.2
M.3
M.4
M.5
Defined
M.6
M.7
M.8
Manageable
Collaborative
Answer
(Yes/No)
125
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
No
No
Yes
Evidence
Level
Leading
Questions
M.17 There are documented and implemented policies to
share the enterprise's information of key indicators
with other enterprises.
M.18 There are support systems to make decisions that ease
carrying out the needed improvements in the
enterprise's processes.
M.19 The performance indicators developed by the
enterprise are used as benchmarking by other
enterprises.
M.20 There are improvement processes to optimize data
collection, their analysis and presentation as
performance indicators.
M.21 There are available systems to generate and monitor
performance indicators in real time.
Answer
(Yes/No)
Evidence
No
Yes
Yes
Yes
No
Based in the results obtained, the maturity level of this enterprise for the view
Performance Measurement Systems is Defined. Therefore, this enterprise should improve
its supply chain processes starting by the opportunities detected by the questions M.10
and M.11. Some recommended actions and tool are the definition of requirements for the
decision making processes at all management levels, assessment of KPIs accuracy,
benchmarking of the KPIs generation process, information systems working together to
ensure accessibility to performance indicators.
Integrating the results obtained from the assessment of all the views, the complete
radar graph of the enterprises supply chain system may be represented graphically as is
shown in Figure 34. According to the results obtained from the assessment of the
enterprises supply chain processes, this enterprise should to improve inventories as
priority one; human resources, information systems and technology, and customers as
priority two; and suppliers, production, and performance measurement systems as priority
126
three. In order to standardize the assessment process the following chapter describes the
assessment methodology, which comes together with the S(CM)2.
5
17,21
14,17
10,11,12
8,9
26,27,28,29
20,21,22, 23,24
12,13,14,15
10,112
1
7,8 0
12,13,14
T
16,17,18
5,6
20,21,22,23
8,10
12
H
2,4
10
16
11
12,14,16
20,21
18,19,20
22,26
127
I
20,21,22,23
CHAPTER VI
THE ASSESSMENT METHODOLOGY OF THE S(CM)2
methodology of the S(CM)2. Also, this chapter shows how to generalize the classification
of the as-is state of the supply chain processes in the enterprise.
6.1 THE GENERALIZATION OF THE SUPPLY CHAIN CLASSIFICATION
Concerning the assessment methodology, this includes the use of several forms and
documentation. In order to provide a standardized classification format for each process
assessment, the model uses a general classification similar to the Kendall & Lee
classification used in queuing theory. Thus, the generalization of the model is defined
through the following format (A / B / C / D) (E / F / G) in which each letter represents the
maturity level of one view after the assessment, such that each variable has a range from
one to five. Regarding the relationship among the letters and the views, this is as follows:
A: Suppliers
B: Production
C: Inventories
D: Customers
E: Human Resources
128
129
The S(CM)2 is a reference model useful to assess and improve the processes in a
supply chain.
Supply Chain
Process Assessment
Assessment
Questionnaire
Analyze the
Assessment
Questionnaire
results
Radar Graph
General
Classification
Determine the
Improvement Road
Map Process
The methodology starts with a general assessment of the supply chain process. This
general assessment is obtained from the results of the assessment questionnaire shown in
Appendix 8. The questionnaire results describe the as is state of the enterprises supply
130
chain under analysis. The result of this general assessment tool is analyzed and reported
in a radar graph. This radar graph, allows prioritizing the supply chain views according
to the maturity level obtained. Also this shows a gap analysis by comparison among the
as-is system and the to-be system defined by the maturity level leading.
Once this step is done, the last assessing step is to obtain the general classification of
the supply chain analyzed as was shown in Figure 35.
131
Assesment Sheet
Analyst name:
Views
Report Date:
Undefined
Defined
Observations
Manageable
Collaborative
Suppliers
Production
Inventories
Customers
Human
Resources
Information
Systems &
Technology
Performance
Measurement
Systems
132
Leadership
CHAPTER VII
CONCLUSIONS AND FUTURE WORK
Enterprises seek to have tools, models, or methodologies to help them improve their
supply chain processes. There are many tools, models and methodologies which might
be implemented to obtain the desired improvements. However, how can an enterprise
select from all of them? Can the expected results be obtained using a particular tool, or a
combination of tools? Does an enterprise have the require maturity and knowledge for
implementing some tool or methodology? Considering these questions, this research
presents a model to provide a Supply Chain Capability Maturity Model S(CM)2, such that
an enterprise may use the S(CM)2 to assess its supply chain and define a road map for its
supply chain improvement process based on the maturity level of each model view.
The S(CM)2 provides a supply chain model including a cross-disciplinary and
dynamic point of view through the model life-cycle and the abstraction levels, which
implicitly consider the time variable. Besides, the meta-model provides a supply chain
representation, which is different from previous models.
The problem related with the selection of a system improvement strategy is addressed
by the set of tools recommended by maturity level, such that an enterprise may select
from these set the improvement tool or select similar tools not included in the list.
Additionally, the supply chain reference actions may be used to select a tool or define an
improvement road map such that the reference action is reached.
133
The final problem discussed was the vertical and horizontal integration. The S(CM)2
addressed this problem integrating the enterprises processes vertically in the maturity
levels one, two and three; after that, the meta-model integrates the enterprises processes
horizontally through collaboration and innovation.
7.1 RESEARCH CONTRIBUTION
This meta-model contributes to the state of the art of enterprise modeling and supply
chain improvement process by defining a method of how companies may improve their
supply chain performance. The meta-model contributions are as follows:
1. The research defines a Capability Maturity Model to assess the processes and
performance of enterprises in the supply chain. This model helps to determine
which processes and variables must be improved or controlled in order to
improve the overall enterprise supply chain performance.
2. The S(CM)2 integrates several best practices, methodologies, concepts, and
tools from different knowledge areas in a cross-disciplinary meta-model.
3. The S(CM)2 provides a set of supply chain reference actions in each maturity
level. These reference actions are used as building blocks for each view and
abstraction level, such that an enterprise may identify its maturity level for
each view by comparing it with the model.
4. The S(CM)2 provides a set of supply chain key improvement factors, which
are prioritized by maturity level, and a set of useful tools to improve the
supply chain processes until reaching the next maturity level
134
5. This research provides a diagnostic tool for the enterprise supply chain
operations processes, oriented to help the company to identify its
improvement opportunities and offer guidance on how to reach the next
maturity level. Moreover, this initial diagnosis enables a plan for improving
its current business processes through different tools and best practices.
6. The S(CM)2 selects a set of tools and best practices to fit the requirements for
each maturity level defined in the S(CM)2. This set of tools and best practices
is a menu of possible solutions, such that an enterprise may customize the sub
set required to improve the opportunities identified by the diagnostic tool.
7. The research contributes to the current state of the art related to merging the
use and implementation of several best practices making them work together
in an improvement process.
8. It provides conclusion and future research about the constraints, advantages
and, disadvantages of the use of a CMM which integrated the successful
concepts of contemporary best practices.
9. The S(CM)2 has advantages over other general reference models because of
the languages used to build the model and the fact that it was developed
specifically to assess and improve the enterprises supply chain processes.
Additionally, the language is easily recognized and common in the supply
chain field.
135
The S(CM)2 presented in this research is the first version; thus, the meta-model may
be improved and increased in the following years. Moreover, the present work includes a
detailed methodology, which describes how the model was built; thus, this research may
be replicated to other fields different from supply chain such as food, automotive,
electronics, and so on.
The final meta-model was built considering only Mexican experts. In order to
increase the confidence in the S(CM)2; it is recommended to consider the opinion of
international experts, such that the model may be considered useful to any supply chain
in the world.
The S(CM)2 is a first level of detailed meta-model. In order to complete the whole
documentation of the model, it is needed to decompose, describe and document each
reference into several detail levels, such that the model describes the activities and tasks,
included in each supply chain reference action.
Finally, the S(CM)2 may be extended and improved through more real
implementation in several enterprises. The results obtained from this implementation
will be helpful to increase the useful tools list and document the real benefits provided by
the improvement projects originated by the enterprises supply chain assessment.
136
REFERENCES
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Impact of ERP on Supply Chain Management: Exploratory Findings from a European
Delphi Study, European Journal of Operation Research, Volume 146, pp. 284-301.
Angerhofer, B. J., and M. C. Angelides (2000), System Dynamic Modeling in Supply
Chain Management: Research Review, Proceedings of the 2000 Winter Simulation
Conference, J. A. Joines, R. R. Barton, K. Kang, and P. A. Fishwick, eds., pp. 342351.
Appelquist, P., J. Lehtonen, and J. Kokkonen (2004), Modeling in Product and Supply
Chain Design: Literature Survey and Case Study, Journal of Manufacturing
Technology Management, Volume 15, Number 7, pp. 675-686.
Argyres, Nicholas (1996), Evidence on the Role of Firm Capabilities in Vertical
Integration Decision, Strategic Management Journal, Volume 17, Number 2, pp.
129-150.
Ballou R. H. (2004), Business Logistics Management, 5th Edition, Phoenix, Arizona,
Prentice Hall Inc.
Barber K. D., F. W. Dewhurst, R. L. D. H. Burns, and J. B. B. Rogers (2003), BusinessProcess Modeling and Simulation for Manufacturing Management: A Practical Way
Forward, Business Process Management Journal, Volume 9, Number 4, pp. 527542.
Bernus, P., and L. Nemes (1997), Requirements of the Generic Enterprise Reference
Architecture and Methodology, A Rev. Control, Volume 21, pp. 125-136.
Braganza, A. (2002), Enterprise Integration: Creating Competitive Capabilities,
Integrated Manufacturing Systems, Volume 13, Number 8, pp. 562-572.
Brewer, P. C. and T. W. Shep (2000), Using the Balance Scorecard to Measure Supply
Chain Performance, Journal of Business Logistics, Volume 21, Number 1, pp. 7593.
Bunting, R., F. Coallier, and G. Lewis (2002), Interdisciplinary Influences in Software
Engineering Practices Proceedings of the 10th International Workshop on Software
Technology and Engineering Practice, pp. 62-69.
Calingo, L. M. R. (1996), The Evolution of Strategic Quality Management,
International Journal of Quality and Reliability Management, Volume 13, Number 9,
pp. 19-37.
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Hicks, D. A. (1999), A Four Step Methodology for Using Simulation and Optimization
Technologies in Strategic Supply Chain Management, Proceedings of the 1999
Winter Simulation Conference, P. A. Farrington, H. B. Nembhard, D. T. Sturrock, G.
W. Evans eds., pp. 1215-1220.
Holmberg, S. (2000). A Systems Perspective on Supply Chain Measurements,
International Journal of Physical Distribution & Logistic Management, Volume 30,
Number 10, pp. 847-868.
Holsapple, C. W. and K. D. Joshi (2000), An Investigation of Factors that Influence the
Management of Knowledge in Organization, Journal of Strategic Information
Systems, Volume 9, pp. 235-261.
Hong-Minh, S. M., R. Barker, and M . M. Naim (2001), Identifying Supply Chain
Solutions in the UK House Building Sector, European Journal of Purchasing &
Supply Management, Volume 7, pp 49-59.
Huang, S. H., S. K. Sheoran, and G. Wang (2004), A Review and Analysis of Supply
Chain Operations Reference (SCOR) Model, Supply Chain Management: An
International Journal, Volume 9, Number 1, pp. 23-29.
Huang, S. H., S. K. Sheoran, and H. Keskar (2005), Computer-Assisted Supply Chain
Configuration Based on Supply Chain Operations Reference (SCOR) Model,
Computers & Industrial Engineering, Volume 48, pp. 377-394.
Kakabadse, N., and A. Kakabadse (2000), Critical Review Outsourcing: A Paradigm
Shift, The Journal of Management Development, Volume 19, Number 8, pp. 670728.
Kasi, V. (2005), Systematic Assessment of SCOR for Modeling Supply Chain,
Proceedings of the 38th Hawaii International Conference on Systems Sciences, pp. 110.
Kengpol A. and M. Touminen (2006), A Framework for group decision support
systems: An Application in the Evaluation of Information Technology for Logistics
Firms, International Journal of Production Economics, Volume 101, pp. 159-171.
Kerr, J. (2002), What Does Lean Really Mean?, Logistics Management, Volume 45,
Number 5, pp 29- 34.
Kole, M. A. (1983), Go Outside for MIS Implementations, Information and
Management, Volume 6, Number 5, pp. 261-268.
Kosanke, K., and M. Zelm (1999), CIMOSA Modelling Process, Computers in
Industry, Volume 40, pp. 141-153.
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141
142
143
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145
APPENDICES
APPENDIX 1: INVITATION LETTER FOR THE FIRST ROUND AT STAGE I
Date: XXXX
To: XXXX
By this mean, I like inviting you to participate in a research project about supply
chain management. The objective of this research is to define a five levels maturity
model to assess the enterprises supply chain processes. The model development implies
to collect and analyze the opinion of several experts in the supply chain field. As you are
considering an expert by your experience and recognition in supply chain or related
fields, your participation is worthwhile to us. The research process involves two rounds
of questions. All the answers provided in the first round will be compiled and
summarized. After you will be receiving a second questionnaire designed to go in depth
in the findings obtained from the first round of answers. I will really appreciate your
time and cooperation.
Sincerely
XXXX
146
Name________________________________
Company _____________________________
Position___________________________________
Years of experience in the supply chain field or similar ________________
Please answer the following open-end questions.
1. What do you understand by supply chain management?
2. According to the following taxonomy:
Level one: an enterprise with poor supply chain development
Level two: -----Level three: -----Level four: -----Level five: an enterprise leader on the market (benchmarking)
What characteristics have an enterprise in each one of these level?
147
To XXXX
I appreciate your previous participation in the first round. This time I like inviting you
to answer this second survey. The objectives of this second round are to improve and to
validate the supply chain definition generated from the first round of results and to
identify the key elements at each maturity level, according to the taxonomy defined in the
previous survey. Thanks again for your time and participation.
Sincerely
XXXX
Name________________________________
Company _____________________________
Position___________________________________
Years of experience in the supply chain field or similar________________
148
After reviewing the data obtained from the first round of results, the following
definition was established:
Supply chain is a network of enterprises, which integrates all processes from the
supply and procurement of raw materials to delivering a finished good. The supply
chain involves all processes oriented to improve logistics and productivity.
1. Select from the following options how much you agree with this definition.
strongly
disagree
moderately
disagree
neutral
moderately
agree
strongly
agree
The following list of supply chain elements was generated from the data obtained in
the first round. According to you, which of them are key factors for each maturity level?
It can be selected as many as you consider relevant for each maturity level. Consider
level one as an enterprise with a poor supply chain development and level five as an
enterprise leader on the market (benchmarking).
149
1. Company Objectives,
vision and mission
10. ISO
19. Product
11. KPI
2. Cost
21. Production
3. Customer requirements
13. Logistics
22. Quality
4. Customer Service
5. Defects/reworks/scrap
6. Demand Forecasting
16. Procedures
7. Demand Management
25. Shipping
8. Enterprise Policies
18. Processes
Synchronization
26. Suppliers
9. Inventory Management
27. Warehousing
150
Sincerely
XXXX
151
Name________________________________
Company _____________________________
Position___________________________________
Years of experience in the supply chain field or similar ________________
Considering this definition, select how much you agree with each of the segments
using the provided scale.
1. Supply Chain is a system which manages and controls the use of facilities, processes,
resources, and supplies in order to improve the logistic productivity in the enterprise.
strongly
disagree
moderately
disagree
neutral
152
moderately
agree
strongly
agree
2. All the processes of the supply chain system have the objective of promoting products
and/or services with value to their customers. This goal is achieved through the
coordination among all the supply chain stakeholders.
strongly
disagree
moderately
disagree
neutral
moderately
agree
strongly
agree
3. All supply chain processes are based on the knowledge and satisfaction of the
customer requirements regarding quality, time response, cost, flexibility, and
innovation.
strongly
disagree
moderately
disagree
neutral
moderately
agree
strongly
agree
153
experience frequent problems in meeting customers expectations; the enterprise does not
have a defined vision or mission.
strongly
disagree
moderately
disagree
neutral
moderately
agree
strongly
agree
Maturity level two (Defined). This is an enterprise which recognizes the value of
defining its vision and mission; at this level the enterprise starts to consider the strategic
market elements such as price fluctuations, new products, tendencies, etc; there is lack of
documentation at all the enterprise levels; the enterprise has not defined a target market to
which offer a wide catalog of products, even though many of the products imply losing
money; the first attempts to develop customer loyalty and suppliers appear; the enterprise
has basic and generic office software without specialized software for the industry or
functions; the enterprise starts to collect data and use them to generate information useful
to making decisions; there are no performance measurement systems; and the
improvement efforts are still unorganized.
strongly
disagree
moderately
disagree
neutral
154
moderately
agree
strongly
agree
Maturity level three (Manageable). The enterprise is searching a target market, the
first attempt to integrate processes is made; the enterprise starts to deploy continuous
improvement plans with special focus on process documentation and standardization; the
personnel is induced to an organizational culture oriented to customer satisfaction and
personal development; there are closer negotiations with suppliers regarding policies,
times and costs; the improvement process applied a set of tools or techniques instead of a
single one; there are isolated information systems useful to measure, control, and make
decisions oriented to processes improvement.
strongly
disagree
moderately
disagree
neutral
moderately
agree
strongly
agree
155
moderately
disagree
neutral
moderately
agree
strongly
agree
Maturity level five (Leading). An enterprise in this maturity level will be able to
innovate, develop, and transfer the best practices; this type of enterprises has a strong
influence over suppliers and customers regarding their work culture and methods,
information systems, continuous improvement processes etc; key processes and functions
156
are aligned to the enterprises mission and corporative strategy; the personnel is aware
about the value that they add to the product with their activities, such that they are
looking for more efficient and effective ways to do them. Information systems integrate
suppliers, company, and customers key information, which is available to everyone who
needs it; there is a strong dependence of technological solutions.
strongly
disagree
moderately
disagree
neutral
moderately
agree
strongly
agree
157
To XXXX
I appreciate your previous participation in the first round. This time I like inviting you
to answer this second survey. The objective of this second survey is to collect a set of
tools useful to improve a supply chain from one maturity level to the next one. The
maturity levels are defined according to the answer obtained from the first round. Thanks
again for your time and participation.
Sincerely
XXXX
Name________________________________
Company _____________________________
Position___________________________________
Years of experience in the supply chain field or similar________________
158
159
decisions; there are no performance measurement systems; and the improvement efforts
are still unorganized.
Maturity Level: Manageable
The enterprise is searching a target market, the first attempt to integrate processes is
made; the enterprise starts to deploy continuous improvement plans with special focus on
process documentation and standardization; the personnel is induced to an organizational
culture oriented to customer satisfaction and personal development; there are closer
negotiations with suppliers regarding policies, times and costs; the improvement process
applied a set of tools or techniques instead of a single one; there are isolated information
systems useful to measure, control, and make decisions oriented to processes
improvement.
Maturity Level: Collaborative
An enterprise at this level has defined collaboration strategies oriented to integrate
customers and suppliers; there is clear orientation to satisfy the customers expectations;
there are several improvement processes related to the knowledge of customers needs;
there are integrated information systems, which provide a technological platform for data
exchange among suppliers, company, and customers, generating key information about
the market and the competence; there are several measurements and evaluation related to
the suppliers performance; there is a better selection of suppliers; the enterprise uses
more complex improvement processes due to the holistic project focus; there is in depth
knowledge of all the enterprises processes.
160
161
162
2. Review the
Catalog of Products
1. Document
Production
Processes
Key
Improvement
Factor
Production
Suppliers
View
163
Performance
Measurement
System
Maturity Level
Tactical
Operational
Abstraction Level
2. Review the
Catalog of Products
1. Document
Production
Processes
Key
Improvement
Factor
Production
Suppliers
View
164
Performance
Measurement
System
Maturity Level
Useful Tools
Strategic
Abstraction Level
3. Focus on Quality
Improvements
Production
Suppliers
1. Define Inventory
Management rules
2. Reduce defects /
reworks / scrap
View
Key
Improvement
Factor
165
Performance
Measurement
System
Information
Systems /
Technology
Maturity Level
Collaborating in the implementation of product Researching how to meet customers needs and
distribution methods based on specific strategies adding value to products; customers' loyalty is a
main concern
(due date, cost, priority etc.)
Tactical
Development of policies to select suppliers
Abstraction level
Operational
D
e
f
i
n
e
d
3. Focus on Quality
Improvements
Production
Suppliers
1. Define Inventory
Management rules
2. Reduce defects /
reworks / scrap
View
Key
Improvement
Factor
166
Performance
Measurement
System
Information
Systems /
Technology
Maturity Level
Useful Tools
Strategic
M
a
n
a
g
e
a
b
l
e
2. Focus on quality
improvements
1. Develop
procedures and
control rules over
all the enterprise's
processes
Key
Improvement
Factor
Production
Suppliers
View
167
Performance
Measurement
System
Information
Systems /
Technology
Maturity Level
Abstraction level
Tactical
Making decisions to improve processes based on Defining the decision-making process based on
current performance indicators
KPI's
Documenting the results obtained from the KPI's Revision and improvement of KPI's in the
definitions and the methods to compute them
enterprise's functions.
Documenting and standardizing processes of data Collecting and analyzing data from customers,
collection.
suppliers, products, and processes.
Establishing raw material requirements according Defining the supplier's performance evaluation
to a specific catalog of products
criteria based on requirement fulfillment
Operational
Key
Improvement
Factor
View
Strategic
Identifying key elements to integrate and to
develop suppliers
1. Develop
procedures and
control rules over
all the enterprise's
processes
Suppliers
2. Focus on quality
improvements
Production
M
a
n
a
g
e
a
b
l
e
Information
Systems /
Technology
Performance
Measurement
System
Useful Tools
168
Key
Improvement
Factor
1. Focus on
customers'
requirements
Abstraction level
View
Suppliers
2. Focus on quality
improvements
Production
C
o
l
l
a
b
o
r
a
t
i
v
e
3. Optimize
inbound and
outbound logistics
processes
4. Analyze and
improve all
production
processes
5. Focus on
offering
outstanding
customer service
Operational
Evaluating the level of collaboration and
integration between suppliers and enterprise
processes
Implementing procedures to evaluate the service
level of the suppliers and provide them feedback.
The enterprise is continuously searching better
suppliers
Tactical
Identifying and customizing the best practices to
integrate suppliers with the enterprise's functions
Identifying key elements to certify suppliers,
defining the rules to invest in their development;
and defining methods to audit and get a
certification renewal
Implementing solid control policies regarding the Implementing collaborative procedures among
supplier's deliveries such as order completeness, suppliers, 3PL's and the functions of procurement
quality assurance, and delivery time
and distribution.
Inventory
Implementing projects of QFD, Kaizen, TQM etc. Generating customers confidence in the products
focusing on customers' needs
and services offered by the enterprise
Customers
Human Resources
Collaborating and supporting the implementation
Defining training requirements to promote
of cross-disciplinary techniques and
innovation and creativity among employees
methodologies through concurrent work teams
7.Optimize product
distribution
Performance
Measurement
System
169
Key
Improvement
Factor
1. Focus on
customers'
requirements
View
Suppliers
Production
C
o
l
l
a
b
o
r
a
t
i
v
e
Useful Tools
2. Focus on quality
improvements
Strategic
3. Optimize
inbound and
outbound logistics
processes
4. Analyze and
improve all
production
processes
5. Focus on
offering
outstanding
customer service
Inventory
Customers
Performance
Measurement
System
Elaborating executive reports and generating the Design together with information systems how to
show KPIs, considering usability concepts;
information required in strategic planning
Define policies to publish KPIs in databases,
Defining and implementing performance metrics reviews, reports etc; Document and communicate
required from suppliers, 3PL's and outsourcing the procedures to obtain KPIs to external
functions
stakeholders.
170
Key
Improvement
Factor
1. Optimize
inbound and
outbound logistic
processes
Abstraction level
View
Suppliers
2. Synchronize
processes
(production, sales,
procurement etc.)
Production
3. Focus on quality
improvements
L
e
a
d
i
n
g
4. Improve
production process
capability
Inventory
5. Focus on
customer's
requirements
Customers
6. Focus on cost
reduction
Operational
Tactical
7. Review and
Improve inventory
management rules
Information
Systems /
Technology
Performance
Measurement
System
171
Key
Improvement
Factor
1. Optimize
inbound and
outbound logistic
processes
View
Strategic
Developing and documenting the best practices
required by an enterprise for it to be included in
the catalog of suppliers
Suppliers
Defining key projects to develop suppliers in the
catalog of suppliers such that their products and
services add value to the product
Making strong alliances and partnerships with
other enterprises
2. Synchronize
processes
(production, sales,
procurement etc.)
3. Focus on quality
improvements
L
e
a
d
i
n
g
Information
Systems /
Technology
Performance
Measurement
System
Useful Tools
Supplier involvement in concurrent engineering
efforts; implementing supplier development and
certification programs; optimizing 3PL
participation; value added analysis; providing
feedback to suppliers about the service level,
joint deployment efforts to improve the service
level
172
After reviewing the model, please answer the following open-end questions
1. What advantages can you identify in the model?
3. This model was developed to assess the processes in a supply chain and defining an
improvement road map. Do you consider this model meet this goal? Yes/No/Why?
173
Manageable, Collaborative, and Leading. The definition of each maturity level is the
following:
Undefined:
Defined:
Manageable:
Collaborative:
Leading:
The following are two assessment reports; these reports are based on findings regarding
the supply chain processes of the Enterprise X and the Enterprise Y. Please classify the
enterprise views regarding the definitions provided by each maturity level.
Enterprise X report
Description of the supply chain processes for the enterprise X. These reports are based
directly on the reference actions included in the model.
174
View
Maturity Level
View
Suppliers
Human Resources
Production
Inventories
Performance
Measurement Systems
Maturity Level
Customers
Enterprise Y report
Description of the supply chain processes for the enterprise Y. These reports are based
directly on the reference actions included in the model.
View
Maturity Level
View
Suppliers
Human Resources
Production
Inventories
Performance
Measurement Systems
Customers
General Information:
Date:
Name:
Position:
Business Type:
Academic Credentials:
175
Maturity Level
VITA
HERIBERTO GARCIA
ACADEMIC DEGREES
2009 Florida International University, Miami, FL
Doctoral Candidate in Industrial and Systems Engineering, Spring 2009
2007 Instituto Tecnolgico y De Estudios Superiores de Monterrey, Nuevo Len, Mx
Master of Science in Industrial Engineering (MSIE)
1996 Instituto Tecnolgico y De Estudios Superiores de Monterrey, Nuevo Len, Mx
Master of Science in Quality Systems (MSQS)
1993 Instituto Tecnolgico y De Estudios Superiores de Monterrey, Nuevo Len, Mx
Bachelor of Science in Mechanical Engineering (BSME)
PUBLICATIONS AND PRESENTATIOSN
Enhancing Simulation as Improvement and Decision Support System Tool, Winter
Simulation Conference, December 2008
Decision Making training tool for a Manufacturing Line using Simulation, Fifth LACCEI
International Latin American and Caribbean Conference for Engineering and Technology
(LACCEI2007), May 2007
Modeling and Analysis of an Oil Platform Evacuation Logistic System using Simulation,
Fifth LACCEI International Latin American and Caribbean Conference for Engineering
and Technology (LACCEI2007), May 2007
Simulation and Analysis of systems using ProModel, Garca Eduardo, H. Garca, L. E.
Crdenas, Prentice Hall, 2006
SOCIETIES AND ORGANIZATIONS
Institute of Industrial Engineering
Institute for the Operations Research and Management Sciences
Omega Rho, Honor Society for Operations Research
Council of Supply Chain Management and Professionals
176